What is the maximum dividend payout ratio consistent with not requiring external funds for a firm with an ROE of 15%, a debt-equity ratio of 50%, and an annual sales growth objective of 9%?
A) Approximately 1%
B) Approximately 10%
C) Approximately 12%
D) Approximately 20% If debt-equity ratio = .5, then 1/3 of the firm is debt financed and 2/3 of the firm is equity financed.
And 2/3 = 66.67%
Internal growth rate =
Correct Answer:
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