Based on the following information, calculate the sustainable growth rate for Lesners Kickboxing: Profit margin = 8.2%

Question:

Based on the following information, calculate the sustainable growth rate for Lesner’s Kickboxing:

Profit margin = 8.2%

Capital intensity ratio = .75

Debt-equity ratio = .40

Net income = $43,000

Dividends = $12,000

What is the ROE here?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-0071051606

8th Canadian Edition

Authors: Stephen A. Ross, Randolph W. Westerfield

See More Books

Question Posted: Jun 24, 2019 09:17 AM

See More Questions

Mud Bay Services Inc. is currently operating at only 95 percent of fixed asset capacity. Current sales are $550,000. How fast can sales grow before any new fixed assets are needed?
In Problem 27, suppose the firm wishes to keep its debt-equity ratio constant. What is EFN now? Data from problem 27 The most recent financial statements for Hopington Tours Inc. follow. Sales for...
Statistics Canada collects data on the value (in $) and volume (in m 3 ) of crude oil, natural gas, and natural gas byproducts produced in Canada each year. Identify the Five Ws, name the variables,...
Why is the number of equivalent units for materials only sometimes equal to the equivalent units for conversion?
Hydration of an aldehyde can also be catalyzed by hydroxide ion. Propose a mechanism for hydroxide-ion-catalyzed hydration.
Use Pascal's triangle to help expand the expression. (2m - n)*
12. What steps must employers take to ensure that they are complying with the Immigration Reform and Control Act?
1: Using variable elimination (by hand!), compute the probability that a student who did well on the test actually understood the material, that is, compute P(+u| + e). 2: For the above Bayesian...
The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,200 direct labor-hours will be required in May. The variable...
a. What are the required elements of arson? b. Tom breaks into a neighbors barn, sets off 20 sticks of dynamite, and blows up the barn. The barn does not catch fire, but it is blown to small bits and...
If the Whalley Corp. has a 15 percent ROE and a 25 percent payout ratio, what is its sustainable growth rate?
If a company is operating at 60 percent of fixed asset capacity and current sales are $350,000, how fast can that company grow before any new fixed assets are needed?
How does the use of no-till farming help reduce climate change?
The Michigan Company has made the following information available for its production facility for the month of June. Fixed overhead was estimated at 19,000 machine hours for the production cycle....
Question 1 Copper Explorations recently acquired the rights to mine a new site. Machinery, equipment and a truck were purchased to begin the mining operations at the site. Details of the assets for...
Large Data Sets from Appendix B. In Exercises 25-28, refer to the indicated data set in Appendix B. Use software or a calculator to find the means and medians. [Data Set] Weights Use the weights of...
When CH4(g) reacts with O2(g) to form CO2(g) and H2O(g), 192 kcal of energy are evolved for each mole of CH4(g) that reacts. Write a balanced equation for the reaction with an energy term in kcal as...
Ben Rogers, Judy Wilkinson, and Henry Walker were the partnership dentists. Ben Rogers became insolvent because of real estate investments. So, Judy Wilkinson and Henry Walker had to then pay the...
In Problem discuss the validity of each statement. If the statement is true, explain why. If not, give a counterexample. If n is a positive integer greater than 1, then u n + v n can be factored.
What is the purpose of the journal wizard?
Real Cash Flows When Marilyn Monroe died ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers...
Real Cash Flows you are planning to save for retirement over the next 30 years. To save for retirement, you will invest $700 a month in a stock account in real dollars and $300 a month in a bond...
Stock Valuation why does the value of a share of stock depend on dividends?
Compute the value of ordinary bonds under the following circumstances assuming that the coupon rate is 0.06:(either the correct formula(s) or the correct key strokes must be shown here to receive...
A tax-exempt municipal bond has a yield to maturity of 3.92%. An investor, who has a marginal tax rate of 40.00%, would prefer and an otherwise identical taxable corporate bond if it had a yield to...
Please note, kindly no handwriting. Q. Suppose a 3 year bond with a 6% coupon rate that was purchased for $760 and had a promised yield of 8%. Suppose that interest rates increased and the price of...

Based on the following information, calculate the sustainable growth rate for Lesners Kickboxing: Profit margin = 8.2%

Question:

Step by Step Answer:

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

Fundamentals of Corporate Finance

Related Video

Students also viewed these Business questions