In Table 4.8, we report WestJet's sustainable growth rate as 13.62%.
a. What would the sustainable growth rate be if Westjet's payout ratio increased to 70%?
b. What would the sustainable growth rate be if Westjet's return on equity was 30%?
Table 4.8

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Air Canada WestJet Performance Measures Market value added ($ millions) 1,992.51 3.505.15 Market-to-book ratio 2.51 1.25 Profitability Measures Return on equity (ROE) 16.91% -72% Return on assets (ROA) 6.49% 11% Return on capital (ROC) 11% 9.31% Operating profit margin 08% 7.34% Efficiency Measures Asset turnover 88 1.31 Receivables turnover 86.856 21.022 Average collection period (days) 17.36 4.20 Leverage Measures Long-term debt ratio 81 .28 Long-term debt-equity ratio 72 -5.50 Debt-to-equity ratio -778 1.61 Debt-to-asset ratio 62 1.15 Times interest earned 9.56 1.01 Cash coverage ratio 2.46 14.19 Liquidity Measures Net working capital to total assets .03 Current ratio 1.09 1.03 Quick ratio .88 -92 Cash ratio 89 24 Growth Measures Payout ratio 194172 Sustainable growth -72% 14%