What is your firm sustainable growth rate

Assignment Help Financial Management

Reference no: EM131549593

You are evaluating a project that costs $5.5 million over its 5-year life. Depreciation is straight-line to zero over the life of the project and it has no salvage value. The discount rate of the project is 13%. On the balance sheet last year, your total assets amounts to $940,000 and total liabilities amounts to $100,000. Tax rate: 30%; Retention ratio: 50%;

The following estimates for the base case is projected:

Sales: 11000 units; Price per unit: 750; Variable cost per unit: 585; Fixed cost per year: $560,000

Last year, your firm had $250,000 in sales, $100,000 in variable costs, $50,000 in fixed costs, and $33,333 in depreciation. Your firm has a 38% retention ratio. TC=35% and RD=8%.

Additionally, the balance sheet last year reported $150,000 in assets and $45,000 in liabilities.

How much does the firm pay in dividends?

If the firm wishes to maintain its debt to equity ratio, how much debt should the firm issue?

What is your firm’s sustainable growth rate?

Reference no: EM131549593

Questions Cloud

Identify the major body systems in the human body : Identify the major body systems in the human body.List the organs found in each body system. Define the basic function of each body system.

Provide information on the board and management structure : Provide information on the board and management structure and critically comment on these with regards to corporate governance matters

Describe the major health concerns of this woman : What are the biophysical, psychological, sociocultural, behavioral and health system factors operating in this situation?

What should be the price of portage bay stock : what should be the price of Portage Bay stock?

What is your firm sustainable growth rate : What is your firm’s sustainable growth rate? How much does the firm pay in dividends?

Explain how treatment modalities differ for endometriosis : Explain how treatment modalities differ for endometriosis, ovarian cysts, and amenorrhea, as well as the implications of these differences.

What are the current maturing ltd : List the changes in Debt levels(long-term liabilities) noted in the Balance Sheet and why was Sprouts able to pay off some of their debt

Restructuring reduce the company vulnerability to takeover : Might this restructuring reduce the company's vulnerability to a takeover? If so, how?

Greenleaf principles of servant leadership : Which of Greenleaf's principles of servant leadership did you implement and learn the most about through completing the servant leadership experience?

User Account

All Pages