Eagle Sports Supply has the following financial statements. Assume that Eagles assets are proportional to...
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Accounting
Eagle Sports Supply has the following financial statements. Assume that Eagles assets are proportional to its sales.
| INCOME STATEMENT, 2019 | |||
| Sales | $ | 1,600 | |
| Costs | 310 | ||
| Interest | 50 | ||
| Taxes | 260 | ||
| Net income | $ | 980 | |
| BALANCE SHEET, YEAR-END | ||||||||||||||||
| 2018 | 2019 | 2018 | 2019 | |||||||||||||
| Assets | $ | 5,250 | $ | 5,550 | Debt | $ | 1,750 | $ | 1,850 | |||||||
| Equity | 3,500 | 3,700 | ||||||||||||||
| Total | $ | 5,250 | $ | 5,550 | Total | $ | 5,250 | $ | 5,550 | |||||||
a. What is the internal growth rate of Eagle Sports if the dividend payout ratio is fixed at 70% and the equity-to-asset ratio is fixed at 2/3? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
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