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Increase in expected growth rate does what to required return rate?
An increase in a firm's expected growth rate would normally cause its required rate of return to
A rapid rate of growth on sales may require?
Increased borrowing by the firm to support the sales increase.
What are three major financial statements used by decision makers outside the firm?
Income statement Trend analysis and Growth Rate Financial Rate
How can a firm increase its sustainable growth rate?
eat pure and raw fruis as well as sprouted mooong,etc
How do you calculate the growth rate of a firm and industry?
The growth rate is the maximum possible rate with only with internal financing. The growth rate of a firm can be calculated with the following equation:internalGrowth rate = (ROA x b) / (1 - ROA x b)Here,ROA = net income / total assetsB (retention rate) = retained earnings / net earnings.Example: The following information is related to firm ABCNet income $180total assets $1,350retained income $100Step # 1:Find the ROA and b (retention rate).ROA = net income / total assetsROA = $180 / $1,350ROA = 0.13 OR 13%b (retention rate) = retained earnings / net income.b = $100/$180b = .55 OR 55%Step # 2:By putting the information in growth formulaGrowth rate = (ROA x b) / (1 - ROA x b)Growth rate = (0.13 x 0.55)/(1 - 0.13 x0.55)Step #3:Solution:Growth rate = (0.13 x 0.55)/(1 - 0.13 x 0.55)= 0.0715 / (1 - 0.0715)= 0.0715 / 0.9285Growth rate = 0.077005924So, growth rate of firm ABC is 7.7%.
An increase in a firm's expected growth rate would normally cause its required rate of return to do what?
possibly increase, possibly decrease, or possibly remain unchanged
Is the growth of a firm advantageous for both the firm and the consumers?
yes
What is the difference between internal and external growth for a firm?
Internal growth, or organic growth, refers to growth strategies where a firm uses its own resources. External growth involves a firm using or accessing the resources of another firm to grow. Examples of external growth strategies include joint ventures, strategic alliances and acquisitions.
How is the supernormal growth pattern likely to vary from normal constant growth pattern in financial management?
Normal, or constant, growth occurs when a firm's earnings and dividends grow at some constant rate forever. One category of non-constant growth stock is a "supernormal" growth stock which has one or more years of growth above that of the economy as a whole, but at some point the growth rate will fall to the "normal" rate. This occurs, generally, as part of a firm's normal life cycle. A zero growth stock has constant earnings and dividends; thus, the expected dividend payment is fixed, just as a bond's coupon payment. Since the company is presumed to continue operations indefinitely, the dividend stream is perpetuity. Perpetuity is a security on which the principal never has to be repaid.
Give the growth rate that corresponds to the growth factor 7?
A growth factor of corresponds to a growth rate of
What is supernormal growth rate?
super normal growth rate is that growth rate which is not constant growth rate. it is flexible growth rate. it means some years or period growth rate is higher than other period. when it is gone constant growth rate certain period and than changed the growth rate, it is called super normal growth rate. some example, we can take here. company x has expected dividend per share is Rs 10. its growth rate is 5 % per year, for next 3 years. and than its growth rate should be changed 10 %. it is the example of super normal growth rate. here, first 3 years has normal growth rate is constant 5% and than it is change by increasing to 10%. here super normal growth rate is start from end of year 3.
What is the percent annual growth rate of Brunei?
which growth rate? the GDP rate right now stands at -1.90% the population growth rate is +2.4%
