Question: Sustainable Growth and Outside Financing. You've collected the following information about Erna, Inc.:
Sales = $275,000
Net Income = $19,000
Dividends = $8,100
Total debt = $67,000
Total equity = $91,000
What is the sustainable growth rate for the company? If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? What growth rate could be supported with no outside financing at all?