Sustainable Growth Rate Country Comfort, Inc., had equity of $145,000 at the beginning of the year. At

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Sustainable Growth Rate Country Comfort, Inc., had equity of $145,000 at the beginning of the year. At the end of the year, the company had total assets of $270,000. During the year the company sold no new equity. Net income for the year was $60,000 and dividends were $26,000. What is the sustainable growth rate for the company? What is the sustainable growth rate if you use the formula ROE X b and beginning of period equity? What is the sustainable growth rate if you use end of period equity in this formula? Is this number too high or too low? Why?

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

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