Response to the following problem:
Plank's Plants had net income of $5,000 on sales of $90,000 last year. The firm paid a dividend of $1,550. Total assets were $300,000, of which $150,000 was financed by debt.
a. What is the firm's sustainable growth rate? (Do not round intermediate calculations. Round your anser to 1 decimal place.)
b. If the firm grows at its sustainable growth rate, how much debt will be issued next year? (Do not round intermediate calculations.)