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1 a) The following information applies to XYZ Co.: ROE = 20% R = 0.8 Current sales = $700 What will happen if the company

1 a) The following information applies to XYZ Co.:

ROE = 20%

R = 0.8

Current sales = $700

What will happen if the company decides that it wants to increase sales to $1,000?

b)Given the following information, what is the desired profit margin?

D/E = 2

Current profit margin = 10%

R = 0.65 Capital intensity ratio = 2

Desired sustainable growth rate = 15%

c)The following information is available regarding XYZ Co.

Sales = $110,000

Net income = $15,000

Dividends = $6,000

Total debt = $65,000

Total equity = $32,000

What growth rate can be supported without outside financing?

d)VWX Inc., has sales of $200,000, net income of $35,000, dividend payout of 50%, total assets of $350,000 and target debt-equity ratio of 1.5. If the company grows at its sustainable growth rate in the coming year, how much new borrowing (to the nearest dollar) will take place?

e)ZYX Ltd. has sales of $1,000,000, retention ratio of 60%, equity multiplier of 2.5, dividends of $30,000, and equity of $312,500. What is the growth rate that the firm can achieve without outside financing?

f)WVU Corporation has a sustainable growth rate of 12.5%, total assets to sales ratio of1.5, profit margin of 10%, and dividend payout of 50%. What is the firm's target D/E ratio?

Please provide detailed explanation on each questions?

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