Plank\'s Plants had net income of $5,000 on sales of $90,000 last year. The firm
ID: 2367963 • Letter: P
Question
Plank's Plants had net income of $5,000 on sales of $90,000 last year. The firm paid a dividend of $1,550. Total assets were $300,000, of which $150,000 was financed by debt. a. What is the firm's sustainable growth rate? (Do not round intermediate calculations. Round your anser to 1 decimal place.) Sustainable growth rage _______% b. If the firm grows at its sustainable growth rate, how much debt will be issued next year? (Do not round intermediate calculations.) New debt$___________ c. WHAT WOULD BE THE MAXIMUM POSSIBLE GROWTH RATE IF THE FIRM DID NOT ISSUE ANY DEBT NEXT YEAR ___________%MAXIMUM GROWTH RATE?Explanation / Answer
g= 3.33x.69= 2.3%, new debt= $153450