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As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model helps a firm assess

image text in transcribed As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting fror increases in liabilities or equity). Consider the following case of Cold Duck Manufacturing Inc. : Cold Duck Manufacturing Inc. has no debt in its capital structure and has $300,000,000 in assets. Its sales revenues last year were $150,000,000 with a net income of $5,000,000. The company distributed $105,000 as dividends to its shareholders last year. Given the information above, what is Cold Duck Manufacturing Inc.'s sustainable growth rate? 0.73% 1.66% 2.73% 0.03% Which of the following are assumptions of the sustainable (self-supporting) growth model? Check all that apply. The firm maintains a constant net profit margin. The firm's total asset turnover ratio remains constant. The firm uses all equity and no debt financing. The firm must issue the same number of new common shares that it issued last year

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