Dahlia, Inc., wishes to maintain a growth rate of 9 percent per year and a debtequity ratio

Question:

Dahlia, Inc., wishes to maintain a growth rate of 9 percent per year and a debt–equity ratio of .40. The profit margin is 7.2 percent, and the ratio of total assets to sales is constant at 2.25. Is this growth rate possible? To answer, determine what the dividend payout ratio must be. How do you interpret the result?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...