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The most recent financial statements for Schenkel Co. are shown here: Income Statement Balance Sheet Sales $ 18,100 Current assets $ 12,200 Debt $ 16,700

The most recent financial statements for Schenkel Co. are shown here:

Income Statement Balance Sheet
Sales $ 18,100 Current assets $ 12,200 Debt $ 16,700
Costs 13,900 Fixed assets 29,500 Equity 25,000
Taxable income $ 4,200 Total $ 41,700 Total $ 41,700
Taxes (40%) 1,680
Net income $ 2,520

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 25 percent dividend payout ratio. No external equity financing is possible.

What is the sustainable growth rate?

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