Use the sustainable growth rate equations from the previous problem to answer the following questions. Sourstone, Inc.,

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Use the sustainable growth rate equations from the previous problem to answer the following questions. Sourstone, Inc., had total assets of $430,000 and equity of $260,000 at the beginning of the year. At the end of the year, the company had total assets of $470,000. During the year, the company sold no new equity. Net income for the year was $80,000 and dividends were $44,000. What is the sustainable growth rate for the company? What is the sustainable growth rate if you calculate ROE based on the beginning-of-period equity?

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Corporate Finance

ISBN: 978-1259918940

12th edition

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

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