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
barxatty [35]
3 years ago
5

Stop and Go has a 4.5 percent profit margin and a 15 percent dividend payout ratio. The total asset turnover is 1.6 and the debt

-equity ratio is 0.60. What is the sustainable rate of growth?
Business
1 answer:
AVprozaik [17]3 years ago
3 0

Answer:

10.85 percent

Explanation:

Return on equity = 0.045 × 1.60 ×(1 + 0.60) = 0.1152

Sustainable growth = [0.1152 × (1 - 0.15)]/{1 - [.1152 × (1 - 0.15)]} = 10.85 percent

The sustainable growth rate is the rate of growth that a company can expect to see in the long term. Often referred to as G, the sustainable growth rate can be calculated by multiplying a company’s earnings retention rate by its return on equity. The growth rate can be calculated on a historical basis and averaged in order to determine the company’s average growth rate since its inception.

The sustainable growth rate is an indicator of what stage a company is in, during its life cycle. Understanding where a company is in its life cycle is important.

You might be interested in
Mest Company has 9 employees. FICA Social Security taxes are 6.2% of the first $118,500 paid to each employee, and FICA Medicare
bulgar [2K]

Answer:

Following are the solution to this question:

Explanation:

Please find the complete question and its solution in the attached file.  

7 0
3 years ago
Bond funds: a) Will lose all value if a single bond defaults b) Are investment bargains because their price is so low c) Are ris
Vsevolod [243]

Answer:

Spread the risk of individual bonds by collectively owning more and less-risky bonds, with higher and lower rates of return

Explanation:

A bond fund is a pooled investment vehicle that invests in various types of bonds. the types of bonds invested in includes cooperate bonds, government bonds and municipal bonds.

The primary objective of bond funds is to generate revenue for investors

Because bond fund is an aggregation of various types of bonds, the risk of the bond fund is lower than the risk of holding any corporate bonds. This is because risks are spread.

4 0
2 years ago
Suppose the Environmental Protection Agency (EPA) wants to mandate that all methane emissions must be reduced to zero in order t
Orlov [11]

Answer:

C

Explanation:

The economists would disagree with this policy because the opportunity cost of zero pollution is much higher than its benefit. The industries involved may have to stop their industrial activities out-rightly or temporarily until they come up with other ways of production which may bring unemployment, reduction in tax paid to government among others.

8 0
3 years ago
Blue Ice Inc. is an American corporation. The company started out as a 1. ____ between Nick Selver and Rita Andrew in 1985. In 2
Andrei [34K]
1) Partnership. Nick Selver and Rita Andrew began the company as a partnership. 
2) partners: This word best describes the interest-holding people in a partnership
3) Incorporate: This word best describes converting the partnership to a corporation in order to democratize ownership of the company and sell stock publicly
4) Stock Market: This is the market in which shares of a public company are traded on the open market. 
6 0
3 years ago
Red Blossom Corporation transferred its 40 percent interest to Tea Company as part of a complete liquidation of the company. In
skelet666 [1.2K]

Answer:

$200,000 and $500,000      

Explanation:

The computations are shown below:

For gain recognized:

= Fair market value of the received land - corporation basis

= $500,000 - $300,000

= $200,000

For land basis received by Red Blossom corporation:

= $500,000

It records only the fair market value of the land, not the land basis for tea Company so only $500,000 would be considered

8 0
3 years ago
Other questions:
  • Suppose the equilibrium price of a pound of bacon is $3.50. The government decides that people have a right to a pound of bacon
    14·1 answer
  • Tamarisk, Inc. had the following transactions during 2022: 1. Issued $280000 of par value common stock for cash. 2. Recorded and
    9·1 answer
  • The deeds and actions of a producer indicate what kind of authority?
    8·1 answer
  • What is the different between economic profit and accounting profit
    12·1 answer
  • Sherry, a 12-year-old, visited a website that wanted to know her family size, her parents' educational level, and her weekly all
    12·1 answer
  • Sol-tex has net income of $1,300,000 and 400,000 shares outstanding. it has preferred dividends of $300,000. what are the earnin
    15·1 answer
  • Johnson Company has the following overhead costs: machine setup $25,000; factory maintenance $10,000; heating and lighting $15,0
    14·1 answer
  • The viability and relevancy of insurance products sold to businesses and individual
    13·1 answer
  • Mar. 17 Received $275 from Shawn McNeely and wrote off the remainder owed of $1,000 as uncollectible. July 29 Reinstated the acc
    10·1 answer
  • A company must account for a contract modification as a new contract if Group of answer choices the modification adds distinct g
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!