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Go-Go Industries is growing at 15% per year. It is all-equity-financed and has total assets of $1 million. Its return on equity is 10%. Its
Go-Go Industries is growing at 15% per year. It is all-equity-financed and has total assets of $1 million. Its return on equity is 10%. Its plowback ratio is 25%. a. What is the internal growth rate? (Enter your answer as a percent rounded to 2 decimal places.) b. What is the firm's need for external financing this year? (Enter your answer in dollars not in millions. Do not round intermediate calculations.) c. By how much would the firm increase its internal growth rate if it reduced its payout ratio to zero? (Enter your answer as a whole percent.) d. By how much would the firm reduce the need for external financing if it reduced its payout ratio to zero? (Enter your answer in dollars not in millions. Do not round intermediate calculations.) a. % b. Internal growth rate External financing Internal growth rate External financing C. % d
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