Question
Plank's Plants had net income of $2,000 on sales of $50,000 last year. The firm paid a dividend of $500. Total assets were $100,000, of
Plank's Plants had net income of $2,000 on sales of $50,000 last year. The firm paid a dividend of $500. Total assets were $100,000, of which $40,000 was financed by debt.
(a)What is the firm's sustainable growth rate? Express your answer as a percentage.
(b)If the firm grows at its sustainable growth rate, how much debt will be issued next year?
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Practical Financial Management
Authors: William R. Lasher
6th Edition
1439080496, 978-1439080498
