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Sunstainable grows, it must support increases in revenue with new investments in assets. The sustainable, or self-supporting, growth model helps a firm asses how rapidly
Sunstainable grows, it must support increases in revenue with new investments in assets. The sustainable, or self-supporting, growth model helps a firm asses how rapidly it can grow, while maintaining a balance between its cash outflaws(increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). consider this case: Blue Elk Manufacturing has no debt in its capital structure and has $250 million in assets. Its sales revenues last year were $150 million with a net income of $150 million. The company distributed $1.55 million as dividends to its shareholders last year. What is the firm's sustainable growth rate? 4.85 % 3.50 % 0.62 % 1.04 % Which of the following are assumptions of the sustainable (serf-supporting) growth model? Check all that apply. The firm maintains a constant net profit margin. The firm maintains a constant ratio of assets to equity. The firm must issue the same number of newcommon shares that it issued last year. Common stock is the firm's only form of equity
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