Go Go Industries is growing at 30% per year. It is all-equity-financed and has total assets of $1 million. Its return on equity is 20%. Its plowback ratio is 35%.
a.
What is the internal growth rate? (Enter your answer as a percent rounded to 2 decimal places.)
Internal growth rate %
b.
What is the firm’s need for external financing this year? (Enter your answer in dollars not in millions. Do not round intermediate calculations.)
External financing $
c.
By how much would the firm increase its internal growth rate if it reduced its payout ratio to zero? (Enter your answer as a whole percent.)
Internal growth rate %
d.
Calculate the revised required external financing. (Enter your answer in dollars not in millions. Do not round intermediate calculations.)
External financing $