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Sound Enterprises is looking to lever up the firm. Their ROE was 10% with a debt...

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Finance

Sound Enterprises is looking to lever up the firm. Their ROE was10% with a debt ratio 0.10. If they pay out 30% of earnings, thenwhat will be the new sustainable growth rate if their new debtratio is 0.250? (Use the approximation)

8.4%

9%

10%

12%

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Transcribed Image Text

Sound Enterprises is looking to lever up the firm. Their ROE was10% with a debt ratio 0.10. If they pay out 30% of earnings, thenwhat will be the new sustainable growth rate if their new debtratio is 0.250? (Use the approximation)8.4%9%10%12%

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