Question
A firm has an asset turnover ratio of 2.0. Its plowback ratio is 40%, and it is all equity-financed. a) What must its profit margin
A firm has an asset turnover ratio of 2.0. Its plowback ratio is 40%, and it is all equity-financed.
a) What must its profit margin be if it wishes to finance 11% growth using only internally generated funds?
b) if the profit margin of the firm is now found to be 6%, what is the maximum payout ratio that will allow it to grow at 8% without resorting to external financing?
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Principles Of Investments
Authors: Alan Marcus, Zvi Bodie, Michael Drew, Anup Basu, Alex Kane
1st Edition
0071012389, 978-0071012386
