Calculate the sustainable growth rate

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Reference no: EM131883745

1. You are given the following information for Hendrix Guitars, Inc.

Profit margin 6.0 %

Total asset turnover 1.8

Total debt ratio .41

Payout ratio 20 %

Calculate the sustainable growth rate.

2. Assume the following ratios are constant:

Total asset turnover 2.6

Profit margin 6.6 %

Equity multiplier 1.5

Payout ratio 25 %

What is the sustainable growth rate?

Reference no: EM131883745

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