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Please answer the following. If correct, I will make sure to thumbs up. Thank you! 5. Sustainable growth Aa Aa As a firm grows, it
Please answer the following. If correct, I will make sure to thumbs up. Thank you!
5. Sustainable growth Aa Aa As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting, or sustainable, growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). Consider the following case of Fuzzy Button Clothing Company: Fuzzy Button Clothing Company has no debt in its capital structure and has $250,000,000 in assets. Its sales revenues last year were $150,000,000 with a net income of $3,000,000. The company distributed $125,000 as dividends to its shareholders last year. Given the information above, what is Fuzzy Button Clothing Company's sustainable growth rate? o 1.16% 1.27% o 0.05% 0.33% Which of the following are assumptions of the sustainable (self-supporting) growth model? Check all that apply. The firm maintains a constant net profit margin. The firm's total asset turnover ratio remains constant. The firm uses all equity and no debt financing. The firm maintains a constant ratio of assets to equityStep by Step Solution
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