# BUSI530 Can someone please help me with these!! Im in the process of taking the test now I have an hour left! but I have no money to pay please! I still have more questions to answer!

March 14, 2016

A firm’s profit margin is 16%, and its asset turnover ratio is 0.8. It has no debt, has net income of \$40 per share, and pays dividends of \$20 per share. What is the sustainable growth rate?

What is the Sustainable growth rate %

6.

Here are the abbreviated financial statements for Planners Peanuts:

INCOME STATEMENT, 2012
Sales \$ 8,000
Cost 6,300

Net income \$ 1,700

BALANCE SHEET, YEAR-END
2011 2012 2011 2012
Assets \$ 4,500 \$ 5,000 Debt \$ 853 \$ 1,000
Equity 3,647 4,000

Total \$ 4,500 \$ 5,000 Total \$ 4,500 \$ 5,000

If the dividend payout ratio is fixed at 50%, calculate the required total external financing for growth rates in 2013 of 25%, 30%, and 35%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

External

Financing
25% \$
30%
35%

7.

Find the sustainable and internal growth rates for a firm with the following ratios: asset turnover = 1.50; profit margin = 6%; payout ratio = 40%; equity/assets = 0.50. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Sustainable growth rate %
Internal growth rate %

8.

Plank’s Plants had net income of \$5,000 on sales of \$100,000 last year. The firm paid a dividend of \$1,100. Total assets were \$200,000, of which \$100,000 was financed by debt.

a.

What is the firm’s sustainable growth rate? (Do not round intermediate calculations. Round your answer to 1 decimal place.)

Sustainable growth rate %

b.

If the firm grows at its sustainable growth rate, how much debt will be issued next year? (Do not round intermediate calculations.)

New debt \$

c.

What would be the maximum possible growth rate if the firm did not issue any debt next year? (Do not round intermediate calculations. Round your answer to 1 decimal place.)

Maximum growth rate

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