Determining the sustainable growth rate, Finance Basics

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Determining the sustainable growth rate

Consider the following information:

Davis

Chili's Bagwell Company

Return on equity (ROE) 15.40% 10.30%

Plowback ratio 0.47 0.82

Sustainable growth 6.90% 8.10%

a. What would the sustainable growth rate be if Davis Chili's plowback ratio rose to the same value as Bagwell Company? (Round your answer to 2 decimal places.)

Sustainable growth rate %

b. What would the sustainable growth rate be if Davis Chili's return on equity were only 14.4%? (Round your answer to 2 decimal places.)

Sustainable growth rate %

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Finance Basics: Determining the sustainable growth rate

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Finance Basics: Determining the sustainable growth rate

Reference No:- TGS042266

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Recent Questions Asked Finance Basics

Q : How much king corporation should increase the carrying value

Q : Weighted average cost of capital from given tax rate

Q : Why amount of imports fall due to rise in exchange rate

Q : What amount should be reported as a charge against income

Q : Determining the sustainable growth rate

Q : Methods of project analysis

Q : What amount should patton show in forman investment account

Q : Which is contributed to real gdp

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Determining the sustainable growth rate

Reference No:- TGS042266

Recent Questions Asked Finance Basics

Q : How much king corporation should increase the carrying value

Q : Weighted average cost of capital from given tax rate

Q : Why amount of imports fall due to rise in exchange rate

Q : What amount should be reported as a charge against income

Q : Determining the sustainable growth rate

Q : Methods of project analysis

Q : What amount should patton show in forman investment account

Q : Which is contributed to real gdp

Q : Retirement income benefits

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