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Problem 18-16 Feasible Growth Rates (LO3) Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales. INCOME
Problem 18-16 Feasible Growth Rates (LO3) Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales. INCOME STATEMENT, 2019 Sales Costs Interest Taxes Net income $ 950 180 60 130 $ 580 BALANCE SHEET, YEAR-END 2018 Assets $ 3,300 2019 $ 3,600 Debt Total $ 3,300 $ 3,600 Equity Total 2018 $ 1,100 2,200 2019 $ 1,200 2,400 $ 3,300 $ 3,600 a. What is the internal growth rate of Eagle Sports if the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at 2/3? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. b. What is the sustainable growth rate? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. a. Internal growth rate b. Sustainable growth rate % %
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