SLG, Inc., has annual sales of $40,934, depreciation of $3,100, interest paid of $750, cost of goods sold of $22,400, taxes of $3,084, and dividends paid of $4,060. The firm has total assets of $55,300 and total debt of $32,600. The firm wants to maintain a constant payout ratio but does not want to incur any additional external financing. What is the firm's maximum rate of growth?

Question

Quizplus · Accepted Answer

The correct answer is A because the firm's maximum rate of growth is 15.79 percent. This is calculated by taking the firm's net income of $11,600 and dividing it by the firm's total assets of $55,300. The resulting number is 0.21, which is then multiplied by 100 to get the percentage of 21%.

SLG, Inc, Has Annual Sales of $40,934, Depreciation of $3,100, Interest