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6 Cards in this Set
- Front
- Back
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INTERNAL GROWTH RATE
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ROA X b (dividend payout ratio) / 1 - ROA X b
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payout ratio
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cash dividends/ NI: what percent payout to stockholders
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b: PLOWBACK RATIO
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1 - payout ratio: what not paid out is retained
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INTERNAL GROWTH RATE : definition
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max. growth rate achieved w/ no external financing
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SUSTAINABLE GROWTH RATE
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ROE X b / 1 - ROE X b
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SUSTAINABLE GROWTH RATE: defintion
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max. growth rate firm can achieve w/ no external equity financing while maintaining a constant debt -equity ratio
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