Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sig, Inc., wishes to maintain a growth rate of 12 percent per year and a debt- equity ratio of 43. The profit margin is 5.9

image text in transcribed

Sig, Inc., wishes to maintain a growth rate of 12 percent per year and a debt- equity ratio of 43. The profit margin is 5.9 percent, and the ratio of total assets to sales is constant at 1.80. What dividend payout ratio is necessary to achieve this growth rate under these constraints? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32.) Answer is complete and correct. Payout -129% ratio Is this growth rate possible? Yes No What is the maximum sustainable growth rate possible given these constraints? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) X Answer is complete but not entirely Sustainable 2.29% growth rate

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Financial And Managerial Accounting The Financial Chapters

Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura

6th Edition

978-0134486840, 134486838, 134486854, 134486846, 9780134486833, 978-0134486857

Students also viewed these Finance questions