2. DuPont Analysis and sustainable growth rate You have located the following information on Rock Company: debt ratio = 40%, capital intensity ratio = 2.25 times, profit margin = 8%, and dividend payout ratio = 25%.

a. What is the return on equity for Rock? (1 point)

b. What is the sustainable growth rate for Rock? (1 point)

Annuity due As a young graduate, you have plans on buying your dream car in three years. You believe the car will cost $50,000. You have two sources of money to reach your goal of $50,000. First, you will save money for the next three years in a money market fund that will return 8% annually. You plan on making $5,000 annual payments to this fund. You will make yearly investments at the BEGINNING of the year. The second source of money will be a car loan that you will take out on the day you buy the car. You anticipate the car dealer to offer you a 6% APR loan with monthly compounding for a term of 60 months, the car loan is repaid at the beginning of each month.

What is the future value of your savings in three years? (1 point)

What is the value of your car loan? (0.5 point)

What will be your monthly car loan repayment? (1 point)