Need help finding the Dividend Payout and Growth Ratios for Target (TGT)

Internal growth rate = (ROA RR) / [1-(ROA RR)]

where RR = Retention ratio = (Addition to retained earnings)/Net income

The internal growth rate measures the amount of growth a firm can sustain if it uses only internal financing (retained earnings) to increase assets

Sustainable growth rate = (ROE RR) / [1-(ROE RR)]

If the firm uses retained earnings to support asset growth, the firms capital structure will change over time, i.e., the share of equity will increase relative to debt

To maintain the same capital structure managers must use both debt and equity financing to support asset growth

The sustainable growth rate measures the amount of growth a firm can achieve using internal equity and maintaining a constant debt ratio

1. Calculate Targets internal growth rate for the last fiscal year:

= (ROA RR) / [1-(ROA RR)]

=

2. Calculate Targets sustainable growth rate for the last fiscal year:

= (ROE RR) / [1-(ROE RR)]

=