Frasier Cabinets Wants to Maintain a Growth Rate of 5

Frasier Cabinets wants to maintain a growth rate of 5 percent without incurring any additional equity financing. The firm maintains a constant debt-equity ratio of .55, a total asset turnover ratio of 1.30, and a profit margin of 9 percent. What must the dividend payout ratio be?

A) 26.26 percent
B) 38.87 percent
C) 49.29 percent
D) 61.13 percent
E) 73.74 percent