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swat32
2 years ago
8

The blue giant has a profit margin of 6.2 percent and a dividend payout ratio of 40 percent. The capital intensity is 1.08 and t

he debt-equity ratio is .54. What is the sustainable rate of growth?
Business
1 answer:
Lana71 [14]2 years ago
6 0

First we calculate the return on equity(ROE) based on the Du-pont equation

ROE =  Net profit margin * Total asset turnover * equity multiplier

Total asset turnover = 1/capital intensity =1/1.08

Equity multiplier = 1+ debt to equity = 1+ 0.54 = 1.54

net profit margin = 6.2% = 0.062

ROE = 0.062*1/1.08*1.54 = 0.0884 = 8.84%

Sustainable growth rate = ROE*(1- dividend payout)

Sustainable growth rate = 0.0884*(1-0.4)

Sustainable growth rate= 0.053 = 5.3%

Sustainable growth rate = 5.30%

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"Jordan's Ice Creams is strategically located near a university. After realizing that most of its customers, who are mostly stud
iragen [17]

Answer:

B. Broad differentiation strategy

Explanation:

Broad differentiation strategy -

It refers to the method to strategize the business or the product in a very unique and innovative manner , is referred to as broad differentiation strategy .

The method is done by trying to adapt new method to present their goods and services , add new features , tries to relate to the likes and dislikes of the consumers .

The method is very helpful for a larger company than for smaller one .

The method is helpful to increase the production of the company , and thereby the profit of the company increases .

Hence , from the given scenario of the question ,

The correct answer is B. Broad differentiation strategy .

6 0
3 years ago
The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the to
ryzh [129]

Answer:

The Question is Incomplete; Full Question is as follows;

Using variable​ costing, what is the contribution margin for last​ year?

<em>Contribution Margin = $362,900</em>

Explanation:

Computation of expenditure margin by differential costing;

<em>Sales </em><em>Minus </em><em>variable cost </em>

  • Sales (190,000 *$8.20)

= $1,558,000  

  • Variable cost of Manufacturing(190,000 units *$1.84)

= $349,600

— variable sales and administrative costs(190,000 units *$4.45)

= $845,500

= contribution margin = $362,900

<em>Keep in mind that; </em><em>Set or Fixed expenses and overhead costs are not taken into account when trying to calculate the contribution margin.</em>

7 0
3 years ago
Paradise Travels is an all-equity firm that has 6,000 shares of stock outstanding at a market price of $34 a share. The firm's m
xenn [34]

Answer:

$2.38

Explanation:

Number of shares purchased

= $40,000 / $34

= $1,176

EBIT / 6,000 = [EBIT - ($40,000 * 0.07)] / (6,000 - 1176)

EBIT / 6,000 = (EBIT - $2,800) / 4,824

4,824 EBIT = 6000 EBIT - $16,800,000

1,176 EBIT = $16,800,000

EBIT = $14,285.71

Earning per Shares at Break-even level of earning

= [EBIT - ($40,000 * 0.07)] / (6,000 - 1,176)

= ($14,285.71 - $2,800) / 4,824

= $11,485.71 / 4,824

= $2.38

3 0
3 years ago
The banking crisis of 2008 is quite interesting to analyze. The factors that led to this near banking collapse are intriguing to
grin007 [14]

Answer:

huh

Explanation:

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2 years ago
Successive waves of globalization include characteristics such as the expansion of trade, the diffusion of technology, extensive
Jlenok [28]

Answer:

E) cross-fertilization of diverse cultures

Explanation:

Cross-fertilization of diverse cultures refers to several cultures mixing together and the result of that mix is that the best qualities or characteristics of each culture are absorbed by the other cultures.

This is a similar concept to the melting pot theory in the US, where diverse immigrants interacted together and they were able to get the best out of each other's culture.

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3 years ago
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