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Neo, Tutor
Category: Homework
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Experience:  BS Accounting
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Calculate the sustainable growth rate for a firm with an 8%

Customer Question

Calculate the sustainable growth rate for a firm with an 8% profit margin, an asset turnover of 1.25, a total debt ratio of 45%, and a plowback ratio of 65%. Assuming that the ROE remains constant, how large can the sustainable growth rate become?

Pls do not respone to this question, I finally figured out the answer.

Submitted: 8 years ago.
Category: Homework
Expert:  Neo replied 8 years ago.

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Customer: replied 8 years ago.
Sorry, I put a msg in my question that I had already figured it out. Why did you put [(1-(18.18%*65%)], I thought the formula for sustainable growth rate was just ROE x plowback ratio.