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Problem 4-7 Calculating Sustainable Growth [LO3] The most recent financial statements for Bello Co. are shown here: Income...

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Finance

Problem 4-7 Calculating Sustainable Growth [LO3]

The most recent financial statements for Bello Co. are shownhere:

Income StatementBalance Sheet
  Sales$20,000Current assets$11,920Debt$16,360
  Costs13,700Fixed assets31,050Equity26,610
  Taxable income$6,300    Total$42,970    Total$42,970
  Taxes (22%)1,386
    Net income$4,914

Assets and costs are proportional to sales. Debt and equity arenot. The company maintains a constant 45 percent dividend payoutratio.

What is the sustainable growth rate? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)

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