You’ve collected the following information about Erna, Inc.: Sales = $ 290,000 Net income = $...

You’ve collected the following information about Erna, Inc.:


Sales	=	$	290,000
Net income	=	$	17,900
Dividends	=	$	6,700
Total debt	=	$	62,000
Total equity	=	$	93,000

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             %

rev: 04_01_2017_QC_CS-84716

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Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 4 months ago

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