Wilkinson and Daughters has net income of $415,400,total assets of $2.2 million,and total liabilities of $1.08 million.The company paid $270,000 in dividends.What is the firm's sustainable rate of growth?
A) 9.69 percent
B) 11.06 percent
C) 12.98 percent
D) 13.93 percent
E) 14.15 percent

Question

Quizplus · Accepted Answer

Sustainable growth rate = [$415,400 / ($2.2m − $1.08m)] × [($415,400 − $270,000) / $415,400] = 12.98 percent

Wilkinson and Daughters Has Net Income of $415,400,total Assets of $2.2