Problem 4-18 Growth and Profit Margin [LO3] Gamgee Company wishes to maintain a growth rate of 11.8 percent per year, a debt- equity ratio of 1.7, and a dividend payout ratio of 20 percent. The ratio of total assets to sales is constant at 89. What profit margin must the firm achieve? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Profit margin %

Problem 4-18 Growth and Profit Margin [LO3] Gamgee Company wishes to maintain a growth rate of 11.8 percent per year, a debt- equity ratio of 1.7, and a dividend payout ratio of 20 percent. The ratio of total assets to sales is constant at 89. What profit margin must the firm achieve? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Profit margin %

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

9th Edition

ISBN:9781305635937

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter4: Analysis Of Financial Statements

Section: Chapter Questions

Problem 3DQ: Looking at Morningstars Profitability ratios, what has happened to Hewlett Packards profit margin...

See similar textbooks

Similar questions

Q. 6 High Flyer, Inc., wishes to maintain a growth rate of 14% per year and a debt-equity ratio of 0.5. The profit margin is 4.6%, and total asset turnover is constant at 1.16. What is the dividend payout ratio? (A negative answer should be indicated by a minus sign. DO NOT round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16) What is the maximum sustainable growth rate for this company? (DO NOT round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16)
P4-19 Growth and Assets [LO3] A firm wishes to maintain an sustainable growth rate of 11 percent and a dividend payout ratio of 64 percent. The ratio of total assets to sales is constant at 1.1, and the profit margin is 9.1 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be? Multiple Choice 6.87 5.87 4.87 2.33 3.87
Problem 3-14 Sustainable Growth [LO 3] Assume the following ratios are constant. Total asset turnover Profit margin Equity multiplier Payout ratio = Sustainable growth rate = = = 2.28 5.6% 1.75 What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 37% %
Assume the following ratios are constant: Profit margin Total asset turnover 2.5 5.2% Equity multiplier 1.3 Payout ratio 22% What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., Answer is complete but not entirely correct. Sustainable growth rate 1.09 %
Q. 5 You’ve collected the following information about Gandalf, Inc.: Sales = $255,000 Net Income = $17,200 Dividends = $6,000 Total debt = $55,000 Total equity = $86,00 What is the sustainable growth rate for the company? (DO NOT round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16) Assuming it grows as this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? (DO NOT round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16) What growth rate could be supported with no outside financing at all? (DO NOT round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16)
Problem 4-12 Internal Growth [LO3] Fairlane Company. has an ROA of 12 percent and a payout ratio of 25 percent. What is its internal growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal Growth Rate.
Problem 3-26 Constraints on Growth Tinsley, Incorporated, wishes to maintain a growth rate of 12 percent per year and a debt-equity ratio of .5. The profit margin is 5.4 percent, and the ratio of total assets to sales is constant at 1.63. What dividend payout ratio is necessary to achieve this growth rate under these constraints? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the maximum growth rate possible? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Is a growth rate of 12 percent possible?
Assume the following ratios are constant: Total asset turnover Profit margin Equity multiplier Payout ratio 2.5 6.5% 1.6 20% What is the sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate %
k ces You've collected the following information about Caccamisse, Incorporated: $ 250,000 $ 17,100 $ 5,900 $ 54,000 $ 85,000 Sales Net income Dividends Total debt Total equity a. What is the sustainable growth rate for the company? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. Assuming it grows at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What growth rate could be supported with no outside financing at all? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Sustainable growth rate b. Additional borrowing c. Growth rate % %
1 02:44:38 Redan, Inc., is expected to maintain a constant 6.1 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 4.6 percent, what is the required return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return %
Problem 9.11 Nyeil, Inc., is a consumer products firm that is growing at a constant rate of 7.5 percent. The firm's last dividend was $3.36. If the required rate of return is 14.0 percent, what is the market value of this stock if dividends grow at the same rate as the firm? (Do not round intermediate calculations. Round answer to 2 decimal places, e.g. 15.25.) Market value Click if you would like to Show Work for this question: Open Show Work
Q. 4 A firm wishes to maintain an internal growth rate of 6.75% and a dividend payout ratio of 31%. The current profit margin is 5.3% and the frim uses no external financing sources. What must total asset turnover be? (DO NOT round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16) Total asset turnover ? times