The Expo Company has the most recent financial statements as follows. The current liabilities are...
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Finance
The Expo Company has the most recent financial statements as follows. The current liabilities are consisted solely of accounts payables. The company maintains a constant dividend payout ratio. The projected sales growth over the next year is 10%. If the Expo Company does not want to incur any additional external financing, what is the maximum rate of growth the firm could achieve?
| Income Statement |
| Balance Sheet | |||||
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| Assets |
| Liabilities and Owners' Equity | |||
| Sales | 4,200.0 |
| Current Assets | 900.0 |
| Current Liabilities | 500.0 |
| Costs | 3,800.0 |
| Net fixed assets | 2,100.0 |
| Long-term debt | 1,800.0 |
| Taxable Income | 400.0 |
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| Owners' equity | 700.0 |
| Taxes (34%) | 136.0 |
| Total Assets | 3,000.0 |
| Total liabilities and owners' equity | 3,000.0 |
| Net Income | 264.0 |
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| Dividends | 132.0 |
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| Addition to retained earnings | 132.0 |
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