Eagle Sports Supply has the following financial statements. Assume that Eagle’s assets are proportional to its sales. INCOME STATEMENT, 2017 Sales $ 1,100 Costs 210 Interest 90 Taxes 160 Net income $ 640 BALANCE SHEET, YEAR-END 2016 2017 2016 2017 Assets $ 3,100 $ 3,400 Debt $ 1,300 $ 1,400 Equity 1,800 2,000 Total $ 3,100 $ 3,400 Total $ 3,100 $ 3,400
a. What is the internal growth rate of Eagle Sports if the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at 2/3? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. What is the sustainable growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)