Davis
Chili’s Bagwell Company
Return on equity (ROE) 15.60% 10.50%
Plowback ratio 0.49 0.84
Sustainable growth 7.10% 8.30%
a.
What would the sustainable growth rate be if Davis Chili’s plowback ratio rose to the same value as Bagwell Company? (Round your answer to 2 decimal places.)
Sustainable growth rate %
b.
What would the sustainable growth rate be if Davis Chili’s return on equity were only 14.6%? (Round your answer to 2 decimal places.)
Sustainable growth rate %
