1. Zero2K20 Inc, profit margin is 15%, total asset turnover is 1.2, equity multiplier is 1.6, and the dividend payout ratio is 35%. The firm has no plan to raise funds externally, only counting on its own internal funding to support growth. What maximum growth rate can Zero2K20 achieve?

1. 6.72%.
2. 7.07%.
3. 11.21%.
4. 13.25%.
5. 23.03%

MUG Inc, a rival company of Zero2K20 has the same profit margin, same total asset turnover, same equity multiplier, and same dividend payout ratio. To support its future growth, the firm plans to raise some debt from creditors while keeping its debt-equity ratio stable. What maximum growth rate can MUG Inc achieve?

a. 6.72%.

b. 8.99%.

c. 11.21%.

d. 13.25%.

e. 23.03%.