Question
Youve collected the following information about Erna, Inc.: Sales = $ 335,000 Net income = $ 18,800 Dividends = $ 7,600 Total debt = $
Youve collected the following information about Erna, Inc.: Sales = $ 335,000 Net income = $ 18,800 Dividends = $ 7,600 Total debt = $ 71,000 Total equity = $ 102,000 What is the sustainable growth rate for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate? % Assuming it grows at this rate, how much new borrowing will take place in the coming year, assuming a constant debtequity ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Additional borrowing? What growth rate could be supported with no outside financing at all? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Growth rate? %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started