Question
You've collected the following information about Allie & Lou Inc.: Sales = $165,000 Net Income = $14,800 Dividends = $9,300 Total Debt = $68,000 Total
You've collected the following information about Allie & Lou Inc.:
Sales = $165,000
Net Income = $14,800
Dividends = $9,300
Total Debt = $68,000
Total Equity = $51,000
1.What is the sustainable growth rate?
2.If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debtequity ratio?
3.What growth rate could be supported with no outside financing at all?
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Introduction To Finance Markets Investments And Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
14th Edition
0470561076, 9780470561072
