Share
Explore BrainMass

Sustainable Rate, Additional Borrowing, and Internal Rate

You've collected the following information about Odyssey, Inc.:

Sales $ 210,000
Net income $ 14,400
Dividends $ 9,200
Total debt $ 84,000
Total equity $ 64,000

What is the sustainable growth rate for the company? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Sustainable growth rate %

If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Additional borrowing $

What growth rate could be supported with no outside financing at all? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Internal growth rate %

Solution Preview

retation ratio=1-9200/14400=0.36
ROE=14400/64000=0.225
Sustainable growth rate ...

Solution Summary

The solution gived detailed steps on solving various questions on sustainable growth rate, additional borrowing and internal growth rate. All formula and calculations are shown and explained.

$2.19