What is its sustainable growth rate

Assignment Help Financial Management
Reference no: EM13768121

SGS Corp. has an ROE of 9 percent and a payout ratio of 17 percent.

What is its sustainable growth rate? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

Reference no: EM13768121

Questions Cloud

Calculate the expected number of employee accidents : The number of employee accidents from the housekeeping department in Hotel A is related to bed height, bed size, and spinal loading. The linear regression model formula has been calculated as following: Y = 3.9+ 8.5(X1) + 2.9(X2) + 5(X3). Calculate t..
Companys cost of equity capital : The Zombie Corporation’s common stock has a beta of 1.1. If the risk-free rate is 5.1 percent and the expected return on the market is 13 percent, what is the company’s cost of equity capital?
Degree of operating leverage : The CFO of Jupiter Jibs (JJ) expects this year's sales to be $2.5 million. EBIT is expected to be $1 million. The CFO knows that if sales actually turn out to be $2.3 million, JJ's EBT will be $888,000. What is JJ's degree of operating leverage (DOL)..
What is its sustainable growth rate : SGS Corp. has an ROE of 9 percent and a payout ratio of 17 percent. What is its sustainable growth rate? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (e.g., 32.16).)
Cost of equity capital using both dividend capitalization : Tri-County Inc. pays an annual common stock dividend of $1.80 per share. The dividend has shown a constant growth rate over the past 5 years from $1.10 to its present level. This growth trend is expected to continue. The company's dividend payout rat..
Debt-to-total-assets ratios and interest rates on debt : Firm AB and Firm YZ are identical except for their debt-to-total-assets ratios (D/TAs) and interest rates on debt. Each has $200,000 in assets, $40,000 EBIT, and a 40 percent marginal tax rate. Firm AB has a D/TA ratio of 40 percent and pays 7.5 perc..
Both the cost of debt as the cost of equity : What is the impact of hedging on a firm’s overall cost of capital? Will it affect both the cost of debt as the cost of equity? Explain.
Firm is considering a new product development : Your firm is considering a new product development. an outlay of $90,000 is required for equipment, and an additional net working capital of $5000 is required. the project is expected to have a 4 year life, and the equipment will be depreciated on a ..

Reviews

Write a Review

Financial Management Questions & Answers

  Zero-coupon bond with exactly same market value and duration

Suppose you have a short position in a 30-year 6%-coupon bond and a long position in a zero- coupon bond with exactly the same market value and duration. If all zero rates fall by 20 basis points, will your net position rise or fall in value? Explain..

  What will the resulting percentage change in EBIT

The Poseidon Swim company produces swim trunks. The average selling price for one of their swim trunks is $38. The variable cost per unit is $25. Poseidon swim has average fixed costs per year of $35,194.

  The annual demand for a product

The annual demand for a product is 1,500 units. The company orders 250 units each time an order is placed. The lead-time is 15 days, and the company has determined that 100 units should be held as a safety stock. There are 250 working days per year. ..

  Forecasts no growth in the dividend

Stock Z will pay a dividend of $3.00, but forecasts no growth in the dividend. The current price of the stock, Po is $30. Calculate the required rate of return, rs.

  Implement a more flexible financing policy

Tri-City Grocers is a chain of grocery stores that just hired a new CFO. Which of the following actions would you expect this CFO to adopt given her statement that she wants to implement a more flexible financing policy for the firm?

  Immediately after coupon payment-calculate the market price

A $10,000 par value bond with coupons at 8%, convertible semi-annually, is being sold three years and four months before the bond matures. The bond is redeemable at $C, and purchase will yield 6% convertible semi-annually to the buyer.

  What is the current value of one share of stock

The Young Han Consulting Group (YHCG) is expanding into a new line of business. Aa result the company plans to increase its annual dividend by 12 percent a year for the next three years and then decreasing the growth rate to 3 percent per year. YHCG ..

  Bond outstanding with an annual coupon rate

General Mills has a $1,000 par value, 12-year bond outstanding with an annual coupon rate of 3.60 percent per year, paid semi-annually. Market interest rates on similar bonds are 12.70 percent. Calculate the bond's price today.

  Describe advantages and disadvantages of choice you made

Would you seek to acquire a company within the European Union or outside of it and describe the advantages and disadvantages of the choice you made.

  Interest payments-what is its yield to maturity

A twenty-year, 5% coupon, $1,000 bond is for sale. It makes annual (once per year) interest payments. (a) What cash flow can I expect if I buy the bond? (b) If its yield to maturity is 7%, what is its price? (c) If its price is $1,080.20, what is its..

  Estimate the probability that the exchange rate

An exchange rate is currently 0.8000. The volatility of the exchange rate is quoted as 12% and interest rates in the two countries are the same. Using the lognormal assumption, estimate the probability that the exchange rate

  Using financial ratio analysis predict whether or not the

using the financial statements from your selected health care organization in assignment 1 develop a financial plan for

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd