Forecast growth rate

a. What is the internal growth rate of Eagle Sport (see Problem 25) if the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed at two-thirds?

b. What is the sustainable growth rate?

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Income Statement Sales $950 Costs 250 Pretax income 700 Taxes (at 28.6%) 200 $500 Net income Balance Sheet, Year-End 2018 2019 2018 2019 $900 Net assets $3,000 $2,700 $1,000 Debt 1,800 Equity 2,000 $3,000 $2,700 $3,000 $2,700 Total Total