The most recent financial statements for Live Co. are shown here: Income Statement Balance Sheet Sales $15,000 Current assets $32,345 Debt $31,878 Costs 9,000 Fixed assets 22,633 Equity 23,100 Taxable income $6,000 Total $54,978 Total $54,978 Taxes (34%) 2,040 Net income $3,960 Assets and costs are proportional to sales. Debt and equity are not.
The company maintains a constant 36 percent dividend payout ratio. No external equity financing is possible.
Required: What is the sustainable growth rate?