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Company A wants to maintain a growth rate of 8 percent a year, a debt-equity ratio of 0.47, and a dividend payout ratio of 58

Company A wants to maintain a growth rate of 8 percent a year, a debt-equity ratio of 0.47, and a dividend payout ratio of 58 percent. The ratio of total assets to sales is constant at 1.34. What profit margin must the firm achieve? Hint: If we find the ROE, we can solve the DuPont identity for profit margin. We can calculate ROE from the sustainable growth rate equation.

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