EXLO Company Has Current Sales of $100,000 and Has Projected

question 23

Multiple Choice

EXLO Company has current sales of $100,000 and has projected annual sales growth of 5%, asset growth of 120%, profit margins of 3%, and its dividend policy is to have a dividend payout of 15% of net income per year.Assume there are no spontaneous liabilities.Ignoring income taxes, the sustainable growth rate (SGR) for EXLO is closest to:

• A)0.13%
• B)0.38%
• C)2.17%
• D)4.25%

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Definitions:

Grocery Store

A retail store that primarily sells food, both fresh and packaged, as well as other household goods.

Market Value

The current price at which an asset or service can be bought or sold in a market.

Measured GDP

The calculated gross domestic product based on data and statistics collected within a specified period, reflecting the economic activity of a country.

Restaurant Meals

A service provided by restaurants where consumers pay to be served prepared food for consumption on the premises.