Solution-Calculate the internal growth rate for the company

Calculate the internal growth rate for the company

Reference no: EM132904026

Question 1 - Fix-It Co. wishes to maintain a growth rate of 9.89 percent a year, a constant debt-equity ratio of .42, and a dividend payout ratio of 40 percent. The ratio of total assets to sales is constant at 1.3. What profit margin must the firm achieve?

Question 2 - ABC, Inc., had equity of $180,000 at the beginning of the year. At the end of the year, the company had total assets of $335,000. During the year, the company sold no new equity. Net income for the year was $38,000 and dividends were $5,200.

a. Calculate the internal growth rate for the company.

b. Calculate the internal growth rate using ROA × b for beginning of period total assets.

c. Calculate the internal growth rate using ROA × b for end of period total assets.

Reference no: EM132904026

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Calculate the internal growth rate for the company

Reference no: EM132904026

Reference no: EM132904026

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