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A firm has an asset turnover ratio of 2.0. Its plowback ratio is 40%, and it is all equity-financed. What must its profit margin be

  1. A firm has an asset turnover ratio of 2.0. Its plowback ratio is 40%, and it is all equity-financed.
    1. What must its profit margin be if it wishes to finance 11% growth using only internally generated funds?
    2. 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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