1. Komatsu has a 4.5 percent profit margin and a 15 percent dividend payout ratio. The asset turnover ratio is 1.6 and the assets- to- equity ratio (using beginning-of –period equity) is 1.77. What is Komatsu’s sustainable rate of growth?
2. The Sustainable growth rate: a. Assumes there is no external financing of any kind b. Assumes no additional long-term debt is available c. Assumes the debt-equity ratio is constant d. Assumes the debt-equity ratio is 1.0 e. Assumes all income is retained by the firm.