You’ve collected the following information about Draiman, Inc.:
Sales $ 160,000
Net income $ 12,400
Dividends $ 8,200
Total debt $ 64,000
Total equity $ 54,000
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?