For the company in the previous problem, what is the sustainable growth rate?

Data from Problem 6 

The most recent financial statements for Barely Heroes Co. are shown here:

Assets and costs are proportional to sales. Debt and equity are not. Barely Heroes maintains a constant 20 percent dividend payout ratio. No external equity financing is possible. What is the internal growth rate?

Transcribed Image Text:

Income Statement Sales Costs Taxable income Taxes (34%) Net income $6,475 3,981 $2,494 848 $1,646 Current assets Fixed assets Total Balance Sheet Debt Equity Total $ 9,000 25,000 $34,000 $22,000 12,000 $34,000