Question

101. Based on the following information, what is the sustainable growth rate of Hendrix Guitars, Inc.? Profit margin Total asset turnover Total debt ratio Payout ratico 5.60 percent 1.76 0.66 70 percent A. 7.68 percent B. 9.52 percent C. 11.12 percent D. 13.49 percent E. 14.41 percent
0 0
Add a comment Improve this question Transcribed image text
✔ Recommended Answer
Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASEHome nert Page Layout Formulas Data Review View dd-Ins s Cut aCopy Σ AutoSum ー E ゴWrap Text в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 Conditional Format eCell Insert Delete Format Sort &Find & 2 ClearFe Select Editing Format Painter Formatting, as Table w styles. ▼ ㆆ ▼ Clipboard Alignment Number Cells Formula Bar CL CM CN CO CP CR CS CT CU CV CX CY CZ 48 49 50 51 52 53 54 profit margin total assets turnover total debt ratio = total debt /total assets = so if total debt-0.66, total assets will be -1 therefore total equity 1-0.66 0.34 5.60% 1.76 0.66 therefore equity/assets - equity multiplier total assets/total equity 1/0.34 0.34 2.94118 56 57 58 59 60 61 62 63 64 65 70% payout ratio retention ratio ROE = PROFIT MARGIN X TOTAL ASSETS TURNOVER X EQUITY MULTIPLIER ROE 28.99% (5.60% x 1.76 x 2.94118) ROE*b/(1-ROE*b) SUSTAINABLE GROWTH RATE ANS : B: SUSTAINABLE GROWTH RATE 9.52% (28.99%(1.30%))/(1-(28.99%(1-30%)) 4 ‘ ト OCF CASH FLOW STAT N -FCF -ARM MSI confidenceINDEX -CURRENCY LOAN CROSS OVER HEDGING MONEY MARKET -GM HPR AM TAX GROWTH SUST PREF AND DIV POLICY I 23-01-2019

Add a comment
Know the answer?
Add Answer to:
101. Based on the following information, what is the sustainable growth rate of Hendrix Guitars, Inc.?...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT