Determine the maximum growth rate

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Reference no: EM132981114

Question - Croatia Company has the following ratios:

Capital intensity ratio 160%

Spontaneous liabilities to Sales ratio 40%

Profit margin 10%

Dividend payout ratio 45%

Sales last year amounted to P100 million. Assuming that these ratios will remain constant, use the AFN equation to determine the maximum growth rate (the sustainable growth rate) the company can achieve without having to employ nonspontaneous funds.

Reference no: EM132981114

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