Question
Youve collected the following information about Gandalf, Inc.: Sales = $ 300,000 Net income = $ 18,100 Dividends = $ 6,900 Total debt = $
| Youve collected the following information about Gandalf, Inc.: |
| Sales | = | $ | 300,000 | |
| Net income | = | $ | 18,100 | |
| Dividends | = | $ | 6,900 | |
| Total debt | = | $ | 64,000 | |
| Total equity | = | $ | 95,000 | |
A. What is the sustainable growth rate for the company?
B. Assuming it grows at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio?
C. What growth rate could be supported with no outside financing at all?
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Credit Derivatives Handbook Global Perspectives Innovations And Market Drivers
Authors: Greg Gregoriou, Paul Ali
1st Edition
0071549528, 978-0071549523
