Question

You’ve collected the following information about Erna, Inc.: Sales = $ 285,000 Net income = $ 17,800 Dividends = $ 6,600 Total debt = $ 61,000 Total equity = $ 92,000

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 12.17 %

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 $ 8455

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 %

(Additional borrowing part is correct so you can ignore that. But those other two are confusing me, I came up with an answer for first one but it says I'm wrong... Thanks for your help)

Answer 1