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A firm wants a sustainable growth rate of 3.43 percent while maintaining a dividend payout ratio of 33 percent and a profit margin of 7
A firm wants a sustainable growth rate of 3.43 percent while maintaining a dividend payout ratio of 33 percent and a profit margin of 7 percent. The firm has asset turnover of 0.5. What is the debtequity ratio that is required to achieve the firm's desired rate of growth? [calculate ROE, and then use Du Pont analysis to calculate equity multiplier. Equity multiplier is equal to 1+D/E]
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