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Problem Sustainable Growth and Outside Financing LO
Youve collected the following information about Caccamisse, Incorporated:
Sales $
Net income $
Dividends $
Total debt $
Total equity $
What is the sustainable growth rate for the company assuming no external equity is allowed?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to decimal places, eg
Assuming it grows at this rate, how much new borrowing will take place in the coming year, assuming a constant debtequity ratio? Note: this is tricky! You must determine how much assets will grow based on the growth rate in the first answer remember assets debt and equity Then, multiply the new assets by the original total debt ratio total liabilities assets
Note: Do not round intermediate calculations and round your answer to decimal places, eg
What growth rate could be supported with no outside financing at all?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to decimal places, eg
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