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uysha [10]
3 years ago
8

The Dog House has net income of $3,450 and total equity of $8,600. The debt-equity ratio is .60 and the payout ratio is 30 perce

nt. What is the internal growth rate
Business
1 answer:
Snezhnost [94]3 years ago
6 0

Answer:

21.29%

Explanation:

The computation of the internal growth rate is shown below:

But before that we need to determine the following calculations

Debt equity ratio js

= debt ÷ equity

The  debt is 0.6 of equity

So,

= 0.6 × $8,600

= $5,160

Now

Total assets = Total liabilities + Total equity

= $8,600 + $5,160

= $13,760

Return on assets = Net income ÷ Total assets

= $3450 ÷ $13760

 = 0.2507

Now  as we know that

Retention ratio = 1 - payout ratio

= 1 - 0.3

= 0.7

And, finally

The Internal growth rate is

= (Return on assets × Retention ratio) ÷ [1 - (Return on assets  × Retention ratio)]

= (0.2507 × 0.7) ÷ [1 - (0.2507 × 0.7)]

= 21.29%

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Answer:

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Explanation:

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Answer:

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Ksju [112]

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The manager of a bank branch is concerned about the number of mistakes the tellers were making, so he started manipulating diffe
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Answer:

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