Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Langston Ltd is considering financing options for its expansion project and plans to use the internal growth rate and sustainable growth rate to support its
Langston Ltd is considering financing options for its expansion project and plans to use the internal growth rate and sustainable growth rate to support its decision. In 2021, Langston has a total asset of $1,050,000 while the companys sales revenue over the year was $1,130,000 and the net profit was $255,000. Manors aims to maintain the debt to asset ratio at a constant level of 25%. During 2021, the company has paid $165,750 as dividends to its shareholders.
Required
- Calculate Langstons sustainable growth rate and internal growth rate?
- Compare Langstons SGR and IGR and provide suggestions on financing options to the company expansion plan?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started