In: Finance
You’ve collected the following information about Erna, Inc.:
Sales | = | $ | 300,000 | |
Net income | = | $ | 18,100 | |
Dividends | = | $ | 6,900 | |
Total debt | = | $ | 64,000 | |
Total equity | = | $ | 95,000 | |
What is the sustainable growth rate for the company? (Do
not round intermediate calculations and enter your answer as a
percent rounded to 2 decimal places, e.g., 32.16.)
Sustainable growth rate
%
Assuming it grows at this rate, how much new borrowing will take
place in the coming year, assuming a constant debt–equity ratio?
(Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.)
Additional borrowing
$
What growth rate could be supported with no outside financing at
all? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
Growth rate
%