EXLO Company has current sales of $100,000 and has projected annual sales growth of 5%,asset growth of 120%,profit margins of 3%,and its dividend policy is to have a dividend payout of 15% per year.Assume there are no spontaneous liabilities.The sustainable growth rate for EXLO is closest to:
A) 0.13%
B) 0.38%
C) 2.17%
D) 4.25%

Question

Quizplus · Accepted Answer

B*PM/(a-b*PM)= (1-.15)*.03/(1.20-(1-.15)*.03))= .0255/1.1745 = 2.17%

EXLO Company Has Current Sales of $100,000 and Has Projected