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1. (2pts) High Flyer, Inc., wishes to maintain a growth rate of 10 percent per year with a fixed debt-equity ratio of 0.4. The profit

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1. (2pts) High Flyer, Inc., wishes to maintain a growth rate of 10 percent per year with a fixed debt-equity ratio of 0.4. The profit margin is 5 percent, and total asset turnover is constant at 1. Is this growth rate possible? To answer, determine what the retention ratio must be. How do you interpret the result? *Hint* Start by using the DuPont identity. 2. (1pt) Imprudential. Inc., has an unfunded pension liability of $100 million that must be paid in 30 years. To assess the value of the firm's stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 4 percent a year, what is the present value of this liability

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