Sound Enterprises is looking to lever up the firm. Their ROE was 10% with a debt...

70.2K

Verified Solution

Question

Finance

Sound Enterprises is looking to lever up the firm. Their ROE was10% with a debt ratio 0.10. If they pay out 30% of earnings, thenwhat will be the new sustainable growth rate if their new debtratio is 0.250? (Use the approximation)

8.4%

9%

10%

12%

Answer & Explanation Solved by verified expert
3.7 Ratings (502 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Sound Enterprises is looking to lever up the firm. Their ROE was10% with a debt ratio 0.10. If they pay out 30% of earnings, thenwhat will be the new sustainable growth rate if their new debtratio is 0.250? (Use the approximation)8.4%9%10%12%

Other questions asked by students