EBIT/Sales = 15%, Sales/Assets = 2.0, Assets/Equity = 2.0, the dividend payout ratio = 10%, the interest rate on debt = 10%, and the tax rate = 40%.

a. What is the sustainable growth rate?

b. How does the sustainable growth rate change in response to reducing any of the above ratios or percentages by onehalf (e.g., EBIT/Sales = 7.5%)?

c. How does the sustainable growth rate change in response to increasing any of the above ratios or percentages by onehalf (e.g., EBIT/Sales = 22.5%)?

d. Do some changes have greater impact on the sustainable growth rate than others? Are the effects linear or nonlinear? Explain your findings.