Assuming the following ratios are constant, what is the sustainable growth rate? Total asset turnover = 2.65

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Assuming the following ratios are constant, what is the sustainable growth rate?

Profit margin = 5.7%

Equity multiplier = 1.60

Payout ratio = 70%

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.

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Corporate Finance

ISBN: 978-1259918940

12th edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

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Question Posted: Dec 05, 2019 07:22 AM

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Assuming the following ratios are constant, what is the sustainable growth rate? Total asset turnover = 2.65

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We must first calculate the ROE using the DuPont ratio to calculate the sustainab...View the full answer

Corporate Finance

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