Sustainable Growth and Outside Financing You’ve collected the following information about Gandalf, Inc.: Sales = $295.000 Net income = $18,400 Dividends = $9,100 Total debt = $68,000 Total equity = $94,000 What is the sustainable growth rate for the company?
If it does grow at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio?
What growth rate could be supported with no out-side financing at all?