Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales. INCOME STATEMENT, 2019 Sales $ 950 Costs 180

image text in transcribed

Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales. INCOME STATEMENT, 2019 Sales $ 950 Costs 180 Interest 60 Taxes 130 Net income $ 580 Assets $ BALANCE SHEET, YEAR-END 2018 2019 3,300 $ 3,600 Debt Equity 3,300 $ 3,600 Total 2018 $ 1,100 2.200 $ 3,300 2019 $ 1,200 2,400 $ 3,600 Total $ a. What is the internal growth rate of Eagle Sports if the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at 2/3? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Internal growth rate 15.90 b. What is the sustainable growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Sustainable growth rate 6.79 %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions