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26. Calculating EFN [LO2] In Problem 24, suppose the firm wishes to keep its debt-equity ratio constant. What is EFN now? 3. EFN and Sustainable

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26. Calculating EFN [LO2] In Problem 24, suppose the firm wishes to keep its debt-equity ratio constant. What is EFN now? 3. EFN and Sustainable Growth [LO2,3] Redo Problem 26 using sales growth rates of 30 and 35 percent in addition to 20 percent. Assume the firm wishes to maintain its debt-equity ratio. Illustrate graphically the relationship between EFN and the growth rate, and use this graph to determine the relationship between them. At what growth rate is the EFN equal to zero? Why is this sustainable growth rate different from that found by using the equation in the text? 26. Calculating EFN [LO2] In Problem 24, suppose the firm wishes to keep its debt-equity ratio constant. What is EFN now? 3. EFN and Sustainable Growth [LO2,3] Redo Problem 26 using sales growth rates of 30 and 35 percent in addition to 20 percent. Assume the firm wishes to maintain its debt-equity ratio. Illustrate graphically the relationship between EFN and the growth rate, and use this graph to determine the relationship between them. At what growth rate is the EFN equal to zero? Why is this sustainable growth rate different from that found by using the equation in the text

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