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A firm wants a sustainable growth rate of 2.88 percent while maintaining a 22 percent dividend payout ratio and a profit margin of 6 percent.

A firm wants a sustainable growth rate of 2.88 percent while maintaining a 22 percent dividend payout ratio and a profit margin of 6 percent. The firm has a capital intensity ratio of 2. What is the debt-equity ratio that is required to achieve the firm's desired rate of growth?

PLEASE SHOW HOW TO FIND THE ORIGINAL ROE. That is what I am needing to see before solving. No credit will be given if it is not shown.

a. 0.60

b. 0.78

c. 0.17

d. 0.20

e. 0.80

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