Evaluate the firms sustainable growth rate

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Reference no: EM1312646

Compute sustainable growth rate

Inkheart Inc has a profit margin of 11% and a retention ratio of 70%. Last year, the firm had sales of $500 and total assets of $1,000. The desired total debt ratio is 75%. What is the firm's sustainable growth rate (SGR)?

Hint: SGR = (ROE x Retention Ratio) / (1- ROE x Retention Ratio)

Reference no: EM1312646

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