FINANCIAL/ALGEBRA PROBLEMS - HELP


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Posted by meanne@techie.com (192.80.68.13) on September 10, 2002 at 07:09:19:

I have two problems: One problem I sent in and noone could figure it out.....

***1. Firm B has a profit margin of 20%, asset turnover 2-1/2, leverage of .3, and a plow back ratio of 60%. What is the sustainable rate of growth? I KNOW the answer is 9% but how do I come up with the answer?

2. Style Corp preferred stock pays a dividend of $3.15 a year. What is the value of the stock if the required rate of return is 8.5%. (Rounded to nearest $1). I came up with $27.

Thanks and have a GREAT day!



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