A firm wishes to maintain an internal growth rate of 12 percent and a dividend payout ratio of 64 percent. The ratio of total assets to sales is constant at 1.1, and the profit margin is 9.6 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be?

A firm wishes to maintain an internal growth rate of 12 percent and a dividend payout ratio of 64 percent. The ratio of total assets to sales is constant at 1.1, and the profit margin is 9.6 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 13P

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