Question-sustainable growth rate


Assume that the following ratios are constant.

Total asset turnover

2.50

Profit margin

7.8%

Equity multiplier

1.80

Payout ratio

60%

Required:

What is the sustainable growth rate?

  1. 16.33%
  2. 16.83%
  3. -8.56%
  4. -5.87%
  5. 26.68%

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Finance Basics: Question-sustainable growth rate
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