Determine a Venture's Sustainable Growth Rate Based on the Following

question 20

Multiple Choice

Determine a venture's sustainable growth rate based on the following information: sales = $1,000,000; net income = $150,000; common equity at the end of last year = $520,000; and the dividend payout percentage = 20%.

• A) 10%
• B) 16%
• C) 20%
• D) 24%
• E) 30%

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Definitions:

Division

A mathematical operation where one number (the dividend) is divided by another (the divisor), showing how many times the divisor fits into the dividend.

Division

A mathematical operation that represents dividing one number by another.

Polynomial

A mathematical expression consisting of variables and coefficients, that involves only the operations of addition, subtraction, multiplication, and non-negative integer exponents.

Factor

A number that divides another number exactly, without leaving a remainder, or the process of breaking down expressions into simpler components that can be multiplied together.