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How much new borrowing will take place in the coming year

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Question: Sustainable Growth and Outside Financing. You've collected the following information about Erna, Inc.:

Sales = $275,000

Net Income = $19,000

Dividends = $8,100

Total debt = $67,000

Total equity = $91,000

What is the sustainable growth rate for the company? If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? What growth rate could be supported with no outside financing at all?

Reference no: EM131727976

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