A firm has set its target capital structure at 40% debt. Further, it intends to continue with a 30% dividend payout. Finally, it hopes to maintain a constant growth rate of 7%. If the profit margin and asset turnover are currently 8% and .9, respectively, do the constraints sound realistic? If not, what might you suggest?

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The Answer of A firm has set its target capital structure at 40% debt. Further, it intends to continue with a 30% dividend payout. Finally, it hopes to maintain a constant growth rate of 7%. If the profit margin and asset turnover are currently 8% and .9, respectively, do the constraints sound realistic? If not, what might you suggest?

A Firm Has Set Its Target Capital Structure at 40