A firm wishes to maintain an sustainable growth rate of 9 percent and a dividend payout ratio of 64 percent. The ratio of total assets to sales is constant at 0.9, and the profit margin is 10.1 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be? Please show proper step by step calculation

Fundamentals of Financial Management, Concise Edition (MindTap Course List)
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Author:Eugene F. Brigham, Joel F. Houston
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Chapter4: Analysis Of Financial Statements
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Problem 3DQ: Looking at Morningstars Profitability ratios, what has happened to Hewlett Packards profit margin...
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A firm wishes to maintain an sustainable growth rate of 9 percent and a dividend payout ratio of 64 percent. The ratio of total assets to sales is constant at 0.9, and the profit margin is 10.1 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be? 

 

Please show proper step by step calculation 

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