The following data has been collected for Xancho Corporation:
$$\begin{array} { | l | r | }
\hline \text { Data: } & \
\hline \text { Sales } & \mathbf { 2 0 0 , 0 0 0 } \
\hline \text { Net Incorne } & 18,000 \
\hline \text { Dividends } & 13,000 \
\hline \text { Total Debt } & 135,000 \
\hline \text { Total Equity } & 55,000 \
\hline
\end{array}$$ Given this information, calculate the following: (a) sustainable growth rate.(b) If the company does grow at this rate, determine the new borrowing that needs to occur.(c) What growth rate could be supported with no outside financing?

Question

The following data has been collected for Xancho Corporation:
 $$\begin{array} { | l | r | } 
\hline \text { Data: } & \
\hline \text { Sales } & \mathbf { 2 0 0 , 0 0 0 } \
\hline \text { Net Incorne } & 18,000 \
\hline \text { Dividends } & 13,000 \
\hline \text { Total Debt } & 135,000 \
\hline \text { Total Equity } & 55,000 \
\hline
\end{array}$$ Given this information, calculate the following: (a) sustainable growth rate.(b) If the company does grow at this rate, determine the new borrowing that needs to occur.(c) What growth rate could be supported with no outside financing?

Quizplus · Accepted Answer

The Answer of The following data has been collected for Xancho Corporation:
 $$\begin{array} { | l | r | } 
\hline \text { Data: } & \
\hline \text { Sales } & \mathbf { 2 0 0 , 0 0 0 } \
\hline \text { Net Incorne } & 18,000 \
\hline \text { Dividends } & 13,000 \
\hline \text { Total Debt } & 135,000 \
\hline \text { Total Equity } & 55,000 \
\hline
\end{array}$$ Given this information, calculate the following: (a) sustainable growth rate.(b) If the company does grow at this rate, determine the new borrowing that needs to occur.(c) What growth rate could be supported with no outside financing?

The Following Data Has Been Collected for Xancho Corporation Given This Information, Calculate the Following: (A) Sustainable Growth Rate