1. An all-equity-financed firm plans to grow at an annual rate of at least 28%. Its return on equity is 43%. What is the maximum possible dividend payout rate the firm can maintain without resorting to additional equity issues? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

2. The 2017 financial statements for Growth Industries are presented below.

INCOME STATEMENT, 2017
Sales				$	210,000
Costs					155,000
EBIT				$	55,000
Interest expense					11,000
Taxable income				$	44,000
Taxes (at 35%)					15,400
Net income				$	28,600
Dividends	$	14,300
Addition to retained earnings		14,300

BALANCE SHEET, YEAR-END, 2017
Assets					Liabilities
Current assets					Current liabilities
Cash	$	4,000			Accounts payable	$	11,000
Accounts receivable		9,000			Total current liabilities	$	11,000
Inventories		27,000			Long-term debt		110,000
Total current assets	$	40,000			Stockholders equity
Net plant and equipment		150,000			Common stock plus additional paid-in capital		15,000
					Retained earnings		54,000
Total assets	$	190,000			Total liabilities and stockholders' equity	$	190,000

Sales and costs are projected to grow at 20% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at 75% capacity, so it plans to increase fixed assets in proportion to sales. Interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of 0.50.

What is the required external financing over the next year? (Negative amounts should be indicated by a minus sign.)