Calculate sustainable growth rate for firm

Question

Problem:

A firm has a debt ratio of 45%, capital intensity ratio is 1.3 times, profit margin is 10%, and dividend payout ratio is 30%.

Required:

Question: Calculate the sustainable growth rate for the firm.

• 2.96%
• 3.05%
• 1.56%
• 4.79%

Note: Show supporting computations in good form.