You've collected the following information about Caccamisse, Incorporated:$ 255,000$19,200$7,500$ 67,000$77,000SalesNet incomeDividendsTotal debtTotal equitya. What is the sustainable growth rate for the company? (Do not round intermecalculations and enter your answer as a percent rounded to 2 decimal plac32.16.)b. If it does grow at this rate, how much new borrowing will take place in the comyear, assuming a constant debt-equity ratio? (Do not round intermediate calcaand round your answer to 2 decimal places, e.g., 32.16.)c. What growth rate could be supported with no outside financing at all? (Do nointermediate calculations and enter your answer as a percent rounde-decimal places, e.g., 32.16.)a. Sustainable growth rateb. Additional borrowingc. Internal growth rate%%

The sustainable growth rate (SGR) for a companySGR = ROE × (1−Dividend Payout Ratio)ROE =…

a. What is the sustainable growth rate for the company? (Do not round interme calculations and enter your answer as a percent rounded to 2 decimal plac 32.16.) b. If it does grow at this rate, how much new borrowing will take place in the con year, assuming a constant debt-equity ratio? (Do not round intermediate calce and round your answer to 2 decimal places, e.g., 32.16.) c. What growth rate could be supported with no outside financing at all? (Do na intermediate calculations and enter your answer as a percent rounde decimal places, e.g., 32.16.)

a. What is the sustainable growth rate for the company? (Do not round interme calculations and enter your answer as a percent rounded to 2 decimal plac 32.16.) b. If it does grow at this rate, how much new borrowing will take place in the con year, assuming a constant debt-equity ratio? (Do not round intermediate calce and round your answer to 2 decimal places, e.g., 32.16.) c. What growth rate could be supported with no outside financing at all? (Do na intermediate calculations and enter your answer as a percent rounde decimal places, e.g., 32.16.)

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

8th Edition

ISBN:9781285065137

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 6DQ

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