Required: a. If Major Manuscripts, Inc. decides to maintain a constant debt-equity ratio, what rate of growth can it maintain assuming that no additional external equity financing is available? b. How sustainable growth contributes towards the growth of a corporation? Discuss.

Major Manuscripts, Inc. 2012 Income Statement Net sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income Taxes Net income $17,100 11,200 1650 4,250 350 $3,900 1.300 2.600 Dividends $950 Major Manuscripts, Inc 2012 Balance Sheet 2012 2012 Cash Accounts rec. Inventory Total Net fixed assets Total assets $1,040 700 7,500 9,240 11.400 $20.640 Accounts payable Long-term debt Common stock Retained earnings $3,350 2,780 10,000 4.510 Total liabilities & equity $20.640