GrowSustain Inc key information table: Payout Ratio - 0% Net Income - 25 million Beginning Stockholders'...

GrowSustain Inc key information table:

Payout Ratio - 0%

Net Income - 25 million

Beginning Stockholders' Equity - 125 million

Beginning Total Assets - 200 million

End Total Assets - 180 million

Using the information of GrowSustain Inc in the above table, calculate its:

a) Internal growth rate.

b) Sustainable growth rate.

c) Sustainable growth rate if it pays out 20% of its net income as a dividend.

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Answer:

=> 25/200 = 12.5%

= 25M/125m = 0.2

1 - 20% = 80%

= 0.8 * 0.2 = 16%

jeff jeffy answered 3 months ago

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