1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
gladu [14]
3 years ago
15

Sustainable Growth Rate You have located the following information on Rock Company: debt ratio = 46.5%, capital intensity ratio

= 2.51 times, profit margin = 21%, and dividend payout ratio = 38%. What is the sustainable growth rate for Rock? (Do not round intermediate steps.)
Business
1 answer:
Sliva [168]3 years ago
7 0

Answer:

The correct answer is 10.72% ( Approx.).

Explanation:

According to the scenario, the given data are as follows:

Debt ratio = 46.5%

Capital intensity ratio = 2.51 times

Profit margins = 21%

Dividend payout = 38%

Formula to calculate sustainable growth rate ae as follows:

Sustainable growth rate = (Earnings retention rate × Return on equity ) / ( 1 - (ROE × RR)

where, Retention rate =(1 - dividend payout rate)

= (1-0.38) = 0.62

ROE = Profit margin × Total asset turonver × Equity multipler

= Profit margin × 1/capital intensity ratio × 1/(1-debt ratio)

= .21 × (1/2.51) × 1/(1-.465)

= .21 × 0.398 × 1.869

= 0.1562

=15.62%

So, Sustainable growth rate = (0.1562*0.62) / 1 - (0.1562*0.62)

= 0.096844 / 0.903156

= 0.1072

= 10.72% (approx.)

Hence, the correct answer is 10.72% (approx.).

You might be interested in
Among the following, who is not a Management expert? Peter F. Drucker Mc Kinsey Albert Grahmbell Elton Mayo
monitta

Answer:

Elton mayo should be the answer

7 0
2 years ago
A corporation has a $500,000 beginning balance in retained earnings. its net income for the year was $200,000. sales revenue amo
natta225 [31]
Given:
<span>$500,000 beg. balance in retained earnings.
</span>$200,000 <span>net income for the year
</span>$1,000,000 <span>sales revenue
</span>$100,000 <span>dividends declared and paid by year-end

Retained earning is the amount left from net income after dividends have been paid. In the given data, sales revenue is not included in the Retained earnings report. It is reflected in the Income statement which generates the Net income. 

Retained Earnings, beg. balance            500,000
Add: Net Income for the year               <u>   200,000</u>
Total                                                                           700,000
Less: Dividends declared and paid this year          <u>   (100,000)</u>
Retained Earnings, end balance                             600,000

</span>
6 0
3 years ago
U.S. firms, their foreign subsidiaries, or foreign firms that are licensees of U.S. technology cannot sell a product to a countr
Butoxors [25]

Answer:

national security of the United States

Explanation:

In the case when the U.S firms, their foreign subsidiaries that have taken the license of United states to not sell the products to a country in which the considered thing is sale due to which it impact the united stated national security as these trade could be prevented because of the concern related to the national security

hence, the above is the correct option

Thus, the same is to be considered

7 0
3 years ago
If Pharrell invests his money in stocks and high-yield bonds, which phrase
Dmitriy789 [7]

The phrase  that describes his investment strategy is "Risky and Long term investor".

Basically, an investment strategy refers to set of rules, behaviors or procedures which are designed to guide an investor's on the selection of an investment portfolio.

  • Majority of investors fall between lower risk investor, moderate risk investor and higher risk investor.

  • The portfolio that he invests in ( stocks and high-yield bonds) is an example of high risk portfolio

In conclusion, the phrase  that describes his investment strategy is "<em>Risky and Long term investor</em>"

Read more about investment strategy:

<em>brainly.com/question/1101043</em>

3 0
2 years ago
A conflict that occurs over natural resources in a municipality is typically which of the following type of conflict?
dybincka [34]

Answer:

Local

Explanation:

It's local because it has to do with a town or district.

8 0
3 years ago
Read 2 more answers
Other questions:
  • Manufacturer's Inc. estimates that its interest charges for this year will be $700 and that its net income will be $3,000. Assum
    12·1 answer
  • Companies generate income from their "regular" operations and from things like interest on securities they hold, which is called
    14·1 answer
  • On January 1, 2018, Riley Corp. acquired some of the outstanding bonds of one of its subsidiaries. The bonds had a carrying valu
    10·1 answer
  • Operating data for Swifty Corporation are presented below. 2022 2021Sales revenue $830,700 $634,900 Cost of goods sold 529,000 4
    9·1 answer
  • Jensen Automotive produces alternators for American-made cars. They generally use a static budget with the following costs based
    8·1 answer
  • Describe a real or made up but realistic example of earned income that you or someone you know has received. What type of work w
    15·1 answer
  • In a(n) ________, an intensive research technique, a company invites six or more people typical of the target market to a sessio
    12·1 answer
  • Investing in yourself and your career often reguires you to "play it safe<br> true or false
    5·1 answer
  • Is money the root of all evil?
    12·2 answers
  • What is the name of the specific protection that the insurer provides to the policy holder
    13·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!