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A fiRm Desires a Sustainable Growth Rate of 13

Question 162

Multiple Choice

A firm desires a sustainable growth rate of 13.3273% while maintaining a 30 percent dividend payout ratio and an 8% profit margin. The firm has a total asset turnover ratio of 1.5. What is the
Debt-equity ratio that is required to achieve the firm's desired rate of growth?


A) 28 %t
B) 35%
C) 40 %
D) 44%
E) 52%

Correct Answer:

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