Assume that an average firm in the office supply business has a 6 percent after-tax profit margin,

Question:

Assume that an average firm in the office supply business has a 6 percent after-tax profit margin, a 40 percent debt/assets ratio, a total assets turnover of 2 times, and a payout ratio of 40 percent. Is it true that if such a firm is to have any sales growth (g > 0), it will be forced either to borrow or to sell (that is, it will need some nonspontaneous, external capital even if g is very small)?
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