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Here are the abbreviated financial statements for Planner's Peanuts: INCOME STATEMENT, 2019 Sales Cost Net income $ 3,500 2,700 $ 800 BALANCE SHEET, YEAR-END
Here are the abbreviated financial statements for Planner's Peanuts: INCOME STATEMENT, 2019 Sales Cost Net income $ 3,500 2,700 $ 800 BALANCE SHEET, YEAR-END 2018 2019 Assets $ 4,500 $ 5,000 Debt Equity 2018 $ 833 3,667 2019 $ 1,000 4,000 Total $ 4,500 $ 5,000 Total $ 4,500 $ 5,000 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. Answer is complete but not entirely correct. a. Internal growth rate b. Sustainable growth rate 8 % 10 %
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