1. You are given the following information for Hendrix Guitars, Inc.
Profit margin 6.0 %
Total asset turnover 1.8
Total debt ratio .41
Payout ratio 20 %
Calculate the sustainable growth rate.
2. Assume the following ratios are constant:
Total asset turnover 2.6
Profit margin 6.6 %
Equity multiplier 1.5
Payout ratio 25 %
What is the sustainable growth rate?