Question
Planks Plants had net income of $5,000 on sales of $50,000 last year. The firm paid a dividend of $1,100. Total assets were $300,000, of
Planks Plants had net income of $5,000 on sales of $50,000 last year. The firm paid a dividend of $1,100. Total assets were $300,000, of which $150,000 was financed by debt.
A. What is the firms sustainable growth rate? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.
B. If the firm grows at its sustainable growth rate, how much debt will be issued next year? Note: Do not round intermediate calculations.
C/ What would be the maximum possible growth rate if the firm did not issue any debt next year? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.
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