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Sustainable growth rate

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A firm's profit margin is 10 percent and its asset turnover ratio is .6. It has no debt, has net income of $10 per share, and pays dividends of $4 per share. What is the sustainable growth rate?

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Solution Summary

The solution explains how to calculate the sustainable growth rate.

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Sustainable Growth rate(SGR) = Return on Equity X Retention Ratio/(1- (ROEXretention ratio))

Return on Equity = Net ...

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