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connect This window shows your responses and what was marked correct and incorrect from your previous attempt. 56. Award: 0.50 out of 1.00 point Problem 3-42 Sustainable Growth [LO 3] You've collected the following information about Sully, Inc. Profit margin Total asset turnover 438% 2.90 Total debt ratio 38 Payout ratio What is the sustainable growth rate for the company? (Do not round intermediate calculat Sustainable growth rate What is the ROA? (Do not round intermediate calculations and enter your answer as a p Return on assets 23% 15.780 % 12.70 0 % References eBook &Resources Worksheet Difficuity: 2 Intermediate Problem 3-42 Sustainable Growth LO 3 Learning Objective: 03-03 Assess the determinants of a firms profitability and growth.

Explanation / Answer

Sustainabale growth rate=(1-dividend payout)*ROE
ROE=net profit/equity=(net profit/sales)*(sales/assets)*(1+(Debt/equity))
=4.38%*2.9*(1+0.38)
=17.53%
=(1-23%)*(17.53%)
=13.50%

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