Problem 3.11 – Internal Growth Rate
Essentials of Corporate Finance
Ross, Westerfield, and Jordan
10th Edition and 11th Edition
Given an ROA and a payout ratio, what is the internal growth rate?
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Given an ROA and a payout ratio, what is the internal growth rate?
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Given ROE and a payout ratio, determine the sustainable growth rate.
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Calculate the sustainable growth rate given the profit margin, capital intensity ratio, debt-equity ratio, net income, and dividends paid.
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Given the total asset turnover, the profit margin, the equity multiplier, and the payout ratio, compute the sustainable growth rate.
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Construct a common-size balance sheet for Bethesda Mining given a balance sheet. Note that you only need to input the blue inputs, the white cells will auto-populate because the balance sheet must balance.
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Given a balance sheet with two years of data, you are asked to compute the following ratios:
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Given a balance sheet, sales, and net income, you are asked to compute the profit margin, total asset turnover, equity multiplier, and ROE for the company.
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Determine the total asset turnover and equity multiplier for the firm.
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Given profit margin, sales, debt, and total assets determine the firm’s ROA.
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What is the internal growth rate? What is the sustainable growth rate?
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