Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sig, Inc., wishes to maintain a growth rate of 14 percent per year and a debt-equity ratio of .4. The profit margin is 6.7 percent,

Sig, Inc., wishes to maintain a growth rate of 14 percent per year and a debt-equity ratio of .4. The profit margin is 6.7 percent, and the ratio of total assets to sales is constant at 1.64.

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.)

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.)

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_2

Step: 3

blur-text-image_3

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

Finance In America An Unfinished Story

Authors: Kevin R. Brine, Mary Poovey

1st Edition

022650204X, 978-0226502045

More Books

Students also viewed these Finance questions

Question

Outline Kodaks pricing strategy for its services.

Answered: 1 week ago

Question

Challenges Facing Todays Organizations?

Answered: 1 week ago