Question
Gilmore, Inc., had equity of $155,000 at the beginning of the year. At the end of the year, the company had total assets of $310,000.
| Gilmore, Inc., had equity of $155,000 at the beginning of the year. At the end of the year, the company had total assets of $310,000. During the year, the company sold no new equity. Net income for the year was $33,000 and dividends were $4,200. |
| a. | What is the sustainable growth rate for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| b. | What is the sustainable growth rate if you use the formula ROE b and beginning of period equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| c. | What is the sustainable growth rate if you use end of period equity in this formula? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
