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Here are the abbreviated financial statements for Planners Peanuts: INCOME STATEMENT, 2019 Sales $ 3,100 Cost 2,300 Net income $ 800 BALANCE SHEET, YEAR-END 2018
Here are the abbreviated financial statements for Planners Peanuts:
INCOME STATEMENT, 2019 | |
Sales | $ 3,100 |
---|---|
Cost | 2,300 |
Net income | $ 800 |
BALANCE SHEET, YEAR-END | |||||
2018 | 2019 | 2018 | 2019 | ||
---|---|---|---|---|---|
Assets | $ 3,500 | $ 4,000 | Debt | $ 853 | $ 1,000 |
Equity | 2,647 | 3,000 | |||
Total | $ 3,500 | $ 4,000 | Total | $ 3,500 | $ 4,000 |
Assume the payout ratio is 50%.
A: Calculate the internal growth rate where no external debt or equity is to be issued. (Note: Do not round intermediate calculations. Enter your answer as a whole percent.)
B. Calculate the sustainable growth rate where the firm maintains a fixed debt ratio but issues no equity. (Note: Do not round intermediate calculations. Enter your answer as a whole percent.)
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