Your company's most recent income statement and balance sheet are given below:

Income statement ($ million)			Balance sheet ($ million)
Sales	15		Current assets	10.4		Debt	15.6
Costs	12		Fixed assets	41.6		Equity	36.4
Net income	3		Total assets	52		Total	52

Sales, assets and costs are expected to grow by the same rate next year, while company expects to keep its debt-equity ratio constant. The company expects to pay out 80% of net income as dividends.

Attempt 1/10 for 10 pts.

Part 1

What is the particular growth rate for the next year, at which company will need zero external financing (EFN=0)? What is the sustainable growth rate?