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Sally Corporation Income Statement

My instructor posted a message in our classroom that said to show our work on our final and she would give us partial credit if we missed the answer to a problem but used the correct method. The attached spreadsheet shows the answers that I turned in and listed below are the correct answers that she gave. I didn't receive partial credit on these three problems. Please help me explain why I think I should have.

Problem 2: $80,000 + 25,000/25,000 = 4.2 times
Problem 3: 1 - 1.50 = .50 + 1.50 = 2.00 times
Problem 4: b = 1- Payout Ratio = 1 - .20 = .80
ROE = .14
Growth Rate = (.14 x .80)/(1 - .14 - .80) = .1120/.888 = .126 = 12.6%.


Solution Preview

See the attached file.
Question 2
Your argument should be that it was not clear whether you are looking for fixed charges other than interest ratio or total fixed charge ratio. Since interest is also a fixed charge, your interpretation of the question is also correct and you should be considered for partial credit. Interest is a fixed charge....stress this and get the ...

Solution Summary

The solution assists with comparing answers to the correct answers and explains why one would not receive partial credits.