Equity Multiplier = 2.013 (2) Retention Ratio:= 1.476 (3) ROA =8.208% (4) ROE :=

Question

Equity Multiplier = 2.013

(2) Retention Ratio:= 1.476

(3) ROA =8.208%

(4) ROE := 16.033%

(5) Internal Growth Rate:-= 13.77%

(6) sustainable Growth rate= ??????

5·??? ????? ?? ?? ??? ?? ???. Windswept, Inc. 2011 Income Statement (S in milions) Net sales Less: Cost of goods sold Less: Depreciation Earnings before interest and taxes Less: Interest paid Taxable Incomne Less: Taxes Net income $8,450 7,240 400 810 70 S 740 S 481 Windswept, Inc 2010 and 2011 Balance Sheets (S in mlions) 2010 2011 S 120 S 140 780 1480-1520 $2,530 $2,440 Net fixed assets 3.1503,600 $5,680 S6,040 2010 2011 $1,110 S1,120 840 1,210 3,200 3,000 530-710 Cash Accounts rec. Inventory Accounts payable Long-term debt Common stock Retained earnings 930 Total Total assets Total liabilities & equity $5,680 $6,040 2011 equity multiplier (Internal Growth Rate retention ratio ROA ROE Sustainable Growth Rate

Explanation / Answer

                                           

Sustainable Growth rate =ROE * Business Retention Rate

                                       = 16.033 * 1.476

                                       =0.2366 or 23.66%

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