Fleur International had a 3% profit margin and a 35% dividend payout ratio.The total asset turnover is 1.25 and the equity multiplier is 1.30.What is the sustainable growth rate?

Name: Fleur International had a 3% profit margin and a 35% dividend payout ratio.The total asset turnover is 1.25 and the equity multiplier is 1.30.What is the sustainable growth rate?
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Question

Quizplus · Accepted Answer

Return on equity= 0.03*1.25*1.30=.04875Sustainable growth = {.04875*(1-.35)}/ {1-[.04875*(1-.35)]} = .03169/.96831 =.0327 = 3.27%

Fleur International Had a 3% Profit Margin and a 35