Calculate the sustainable growth rate of the company

Assignment Help Financial Management

Reference no: EM13882050

Johnson Products earned $3.10 per share last year and it paid out $.75 dividend. The company’s ROE is 16%. a) Calculate the dividend payout ratio; b) Calculate the sustainable growth rate of the company.

Reference no: EM13882050

Questions Cloud

Annual dividend-what is the capital gains yield : The Toy Chest pays an annual dividend of $4.80 per share and sells for $93.20 a share based on a market rate of return of 15 percent. What is the capital gains yield?

Compute the company''s return on investment : Compute the company's return on investment

They feel the business will be worthless : Marko, Inc. is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $6,000, $11,000, and $17,200 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has deter..

Which machine if any should the company select at a marr : An engineer performed the following analysis to select the best machine, all of which have a 10-year life. Which machine, if any, should the company select at a MARR of 22% per year?

Calculate the sustainable growth rate of the company : Johnson Products earned $3.10 per share last year and it paid out $.75 dividend. The company’s ROE is 16%. a) Calculate the dividend payout ratio; b) Calculate the sustainable growth rate of the company.

Particular type of bacteria grows : A particular type of bacteria grows at a rate of 17% per day. If my hyena got infected with 700 bacterium when his leg was cut by barbed wire, how many bacterium will be present in 3 days when I finally decide I need to take the hyena to the veterina..

With the stock market return as the discount rate : Last year Star Inc paid a dividend of $1.50 on its common stock last year. You expect the dividend will increase at 15% each year over the next three years; but after that, a normal growth rate of 5% is expected for the foreseeable future. The stoc..

Whats the sustainable growth rate : Abbott Lab made $2.80 net income per share last year and paid out $1.30 in dividend. The company had a book value (or equity) per share of $20. The market has a risk free rate of 3.1% and market return 11.1%. Abbott has a historical beta of .90. Wh..

Which alternative is best if the minimum attractive rate : The table includes the overall ROR and the incremental comparison of alternatives. Which alternative is best if the minimum attractive rate of return is ( a ) 15% per year and ( b ) 12% per year?

User Account

All Pages