solve questions about roa roe payout ratio capital intensity ratio debt equity ratio

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1. If Company ABC has a 8% ROA and 30% payout ratio, what is its internal growth rate?

2. EFG company has a 16% ROE and a 40% payout ratio, what is its sustainable growth rate?

3. Calculate the sustainable growth rate for XYZ Corporation: Profit margin = 9.2%, Capital intensity ratio = .80, Debt-Equity Ratio = .70, Net Income = $80,000, Dividends = $21,000.

4. Assume the following ratios are constant, what is the sustainable growth rate? Total Asset Turnover = 3.10, Profit margin = 5.4%, Equity Multiplier = 1.5, Payout ratio = 40%.

5. PQR Corporation is currently operating at 85% fixed asset capacity and current sales of $2.5 Million. How fast can sales grow before any new fixed assets are needed?

6. GHI Corporation is planning to grow 15% per year while maintaining a debt-equity ratio of 1.3 and dividend payout ratio of 35%. The ratio of total asset to sales is constant at .80. What profit margin must the company reach in order to be successful?

 
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