COLLAPSE

Lockheed Martin, the nation's largest defense contractor, needs to constantly update the capabilities and efficiency of its products.This requires a consistent need for investments in new technologies and capacities.According to the pecking order theory, they would prefer to use internal financing before they go outside of the firm to raise funds.Assume Lockheed Martin had a net income of 1,659 ($M) in 2020.Equity levels are 4,953 ($M) and assets are 50,773 ($M).Reinvest earnings are 18,401 ($M).

1. Calculate the internal growth rate of the company
2. Calculate the sustainable growth rate of the company
3. What does the difference in these two values suggest?