You've collected the following information about Fox, Inc.: Sales = $165,000 Net income = $19,000 Dividends =
Question:
You've collected the following information about Fox, Inc.:
Sales = $165,000
Net income = $19,000
Dividends = $4,500
Total debt = $49,000
Total equity = $72,000
What is the sustainable growth rate for the company? If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? What growth rate could be supported with no outside financing at all?
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Step by Step Answer:
To find the sustainable growth rate we need the retention ratio and the return on equity The payout ...View the full answer
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Related Book For 
Essentials Of Corporate Finance
ISBN: 9780073405131
6th Edition
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan
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