P4-7 Calculating Sustainable Growth [LO3]

The most recent financial statements for Bello Co. are shown here:

Income Statement		Balance Sheet
Sales	$17,000	Current assets	$36,657	Debt	$36,128
Costs	10,200	Fixed assets	25,651	Equity	26,180
Taxable income	$6,800	Total	$62,308	Total	$62,308
Taxes (23%)	1,564
Net income	$5,236

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 24 percent dividend payout ratio.

What is the sustainable growth rate?

P4-7 Calculating Sustainable Growth [LO3] The most recent financial statements for Bello Co. are shown here: Balance Sheet $36,657 Debt $36,128 25,651 Equity 26,180 Income Statement Current Sales $17,000 assets Fixed Costs 10,200 -assets Taxable $6,800 Total income Taxes (23%) 1,564 Net income $5,236 $62,308 Total $62,308 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 24 percent dividend payout ratio. What is the sustainable growth rate? Multiple Choice O O 17.92% O 6.82% 5.04% O O 17.42 % 18.42%