Growth Rates based on the result in Problem 31, show that the internal and sustainable growth rates
Question:
Growth Rates based on the result in Problem 31, show that the internal and sustainable growth rates are as given in the chapter.
S = Previous year’s sales
A = Total assets
D = Total debt
E = Total equity
g = Projected growth in sales
PM = Profit margin
b = Retention (plowback) ratio
Show that EFN can be written as follows:
EFN = - PM(S)b + (A - PM(S)b) × g
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 73% (19 reviews)
We start with the EFN equation we derived in Problem 32 and set it equal to zero EFN 0 PMS...View the full answer
Answered By
Muhammad Umair
I have done job as Embedded System Engineer for just four months but after it i have decided to open my own lab and to work on projects that i can launch my own product in market. I work on different softwares like Proteus, Mikroc to program Embedded Systems. My basic work is on Embedded Systems. I have skills in Autocad, Proteus, C++, C programming and i love to share these skills to other to enhance my knowledge too.
3.50+
1+ Reviews
10+ Question Solved
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
Question Posted:
Students also viewed these Corporate Finance questions
-
Based on the result in Problem 30, show that the internal and sustainable growth rates are as given in the chapter. Hint: For the internal growth rate, set EFN equal to zero and solve for g .
-
Based on the result of Exercise 8.24, show that if X is a random variable having a chi square distribution with v degrees of freedom and v is large, the distribution of X v / 2v can be approximated...
-
Based on the result of Problem 13.8, plot the vertical field patterns of monopole antennas of lengths = 3/2, , 5/8. Note that a 5/8 monopole is often used in practice.
-
The system shown consists of 3 cables. For example; cable C12 joins points 1 and 2. The coordinates of point 1 are (6.4, 0, 0) m, those of point 2 are (0, 9.5, -6.1) m, and those of point 3 are (0,...
-
Suppose partial melting of the polar ice caps increases the moment of inertia of the Earth from 0.331 M E R E 2 to 0.332 M E R E 2 . (a) Would the length of a day (the time required for the Earth to...
-
A study of U.S. births published on the website Medscape from WebMD reported that the average birth length of babies was 20.5 inches and the standard deviation was about 0.90 inch. Assume the...
-
Different life circumstances affect housing needs for people at different stage of their lives. Write About It Write a paragraph describing the housing needs of a 28-year-old married couple expecting...
-
On December 1, 2014, Prosen Distributing Company had the following account balances. During December, the company completed the following summary transactions. Dec. 6 Paid $1,600 for salaries and...
-
Alan opened XYZ Laundry Service on July 1, 2020. During July, the company completed the following transactions. July 1 Invested $14,000 cash in the business. 1 Purchased a used truck for $1...
-
Watershed is a media services company that provides online streaming movie and television content. As a result of the competitive market of streaming service providers, Watershed is interested in...
-
EFN Define the following: S = Previous years sales A = Total assets D = Total debt E = Total equity g = Projected growth in sales PM = Profit margin b =Retention (plowback) ratio Show that EFN can be...
-
Sustainable Growth Rate In the chapter, we discussed the two versions of the sustainable growth rate formula. Derive the formula ROE X b from the formula given in the chapter, where ROE is based on...
-
Selected information relating to the fixed overhead costs of Westwood Company for the most recent year is given below: Activity: Number of units produced . . . . . . . . . . . . . . . . . . . 9,500...
-
Bianca throws a football from the edge of a cliff at a height of 22 m at a velocity of 18 m/s [40 above the horizontal]. Nelson is at the bottom of the cliff 12 m away from the base of the cliff....
-
Please fill out the table, Reading 1. Rosenberg 1991 2. Alexander 2012 [2010] 3. Kramer & Remster 2018 a. Key concept or main idea. Dynamic v. constrained court view Mass incarceration Legal cynicism...
-
Haley Hopkins plans to deposit $24,000 into her retirement account at the end of every year for the next 15 years. The account will earn 12 percent every year. Assuming she does not make any...
-
Suppose the source of atoms in a Stern-Gerlach experiment was an oven of temperature 1010 K. Assume the magnetic field gradient to be 13 T/m, and take the length of the magnetic field region and the...
-
At some point, not close to its ends, within a solenoid of arbitrary length, calculate the approximate magnetic field if the solenoid carries a current 13.0 A and has 230.0 turns per meter of the...
-
What are some distinguishing characteristics of nationstates? Give some examples of state societies that are not nation-states and some that are. Explain why your examples are or are not...
-
What can you do to reduce hunger where you live? To reduce hunger globally?
-
Based on what youve learned in this chapter, would you classify the chemistry of polymers as organic or inorganic?Why?
-
Define each of the following terms: a. Greenmail. b. White knight. c. Golden parachute. d. Crown jewels. e. Shark repellent. f. Corporate raider. g. Poison pill. h. Tender offer. i. Leveraged buyout...
-
In 2014, activist investor Nelson Pelz was pressuring PepsiCo to split up the company. Pelz felt that PepsiCo should split up the soft drink division, which includes Pepsi, Mountain Dew, and...
-
Pearl, Inc., has offered $357 million cash for all of the common stock in Jam Corporation. Based on recent market information, Jam is worth $319 million as an independent operation. If the merger...
-
What GAAP principle is involved in the transfer of cash received in advance from the balance sheet to revenue on the income statemen O Business entity O Matching O Revenue recognition O Going concern
-
Assume that you are attempting to find the present value of a 60- period, $100 annuity, where the first payment takes place at Period 1, and the last payment takes place at Period 60 (some people...
-
For purposes of the law, an excess attributable to the failure of the ACP test is called an A excess distribution. B excess deferral. C excess aggregate contribution. (D) excess contribution.
Study smarter with the SolutionInn App