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Novosadov [1.4K]
2 years ago
6

Stop and Go has a 4 percent profit margin and a 43 percent dividend payout ratio. The total asset turnover is 1.65 and the debt-

equity ratio is .70. What is the sustainable rate of growth
Business
1 answer:
frosja888 [35]2 years ago
8 0

Answer:

6.83%

Explanation:

Given :

Profit margin = 4% = 0.04

Dividend payout ratio = 43% = 0.43

Asset turnover = 1.65

Debt to equity = .7

The retention rate is 1 - the payout ratio = 1 - 0.43 = 0.57

The sustainable growth rate is given by :

(ROE * Retention Rate) / (1 - (ROE * Retention Rate))

Return on Equity (ROE) :

Profit margin * Asset turnover * Equity multiplier

Equity ratio = debt to equity ratio + 1 = 0.7 + 1 = 1.7

= 0.04 * 1.65 * 1.7 = 0.1122

Sustainable growth rate :

(ROE * Retention Rate) / (1 - (ROE * Retention Rate))

(0.1122 * 0.57) / (1 - (0.1122 * 0.57))

0.063954 / 0.936046

= 0.0683235

= 6.83%

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Roadtec Tire Company has a corporate culture that emphasizes an internal focus on the involvement and participation of employees
Otrada [13]

Answer: (D) Involvement culture

Explanation:

 According to the given question, the involvement culture is one of the type of corporate culture that helps in focusing the various types of internal functions such as the involvement and also the participation of the employees in an organization.

The road-tech tire is one of the company that possess the involvement corporate culture for its family like environment and caring nature for the employees.

The main advantage of the involvement culture is that it helps in reduce the stressful environment of an organization and also providing the various types of economical and social based benefits.

 Therefore, Option (D) is correct answer.

5 0
3 years ago
Country A had a population of 2,000, of whom 1,300 worked an average of 8 hours a day and had a productivity of 5. Country B had
SpyIntel [72]

Answer:

Country

  • c. B had the higher level of real GDP and Country A had the higher level of real GDP per person

Explanation:

Country A's population 2,000, worked 1,300 with 8 hours a day with a productivity of 5 = 52,000 units of something produced. GDP per capita = 52,000 / 2,000 = <u>26 per capita</u>

Country B's population 2,500, worked 1,700 with 8 hours a day with a productivity of 4 = <u>54,400 units</u> of something produced. GDP per capita = 54,400 / 2,500 = 21.76 per capita

3 0
2 years ago
Seahorse Incorporated, which only has one product, has provided the following data concerning its most recent month of operation
ra1l [238]

Answer:

Unit product cost = $107

Explanation:

<em>Absorption costing is a method of costing where production units and inventories are value at the full cost per unit. Here, fixed overheads are charged to all units produced using an overhead absorption rate</em>

The full cost per unit = D.mat cost + D.labour cost + Variable overheads+ Fixed overheads

Fixed production overhead cost per unit

=Fixed manufacturing overhead/units produced

=  $43,700/ 1,900 Units

=$23 per unit

Full cost per unit

= $42  + $31 + $11 + 23

= $107

7 0
2 years ago
Sharon was debating whether she should open an account with a savings and loan association or with a credit union. She decided t
Yakvenalex [24]
The interest rate might have been higher.
8 0
2 years ago
The current risk-free rate of return in the economy is 1.5%. In addition, the market rate of return is currently 6%. Given that
ludmilkaskok [199]

Answer:

The company’s systemic risk level (beta coefficient) is 2.44%

Explanation:

According to Capm Expected Return of Stock = Risk Free Rate + Beta*(Market Return - Risk Free Rate)

Beta = (Expected Return of Stock - Risk freed Rate)/(Market return -Risk free Rate)

        = (12.5% - 1.5%)/(6% - 1.5%)

        =2.44 %

Therefore, The company’s systemic risk level (beta coefficient) is 2.44%

Systematic risk is the risk which affects all the stocks of the economy. It cannot be diversified away. Example interest rate and inflation in the economy. Beta represents systematic risk of the company.

7 0
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