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Fundamentals of Corporate Finance, 8 th edition, Brealey, Myers, Marcus, (Chpt 18, Q24, LO3) 5.If the profit margin of the firm in Problem 4 is

Fundamentals of Corporate Finance, 8th edition, Brealey, Myers, Marcus,

(Chpt 18, Q24, LO3)

5.If the profit margin of the firm in Problem 4 is 6%, what is the maximum payout ratio that will allow it to grow at 8% without resorting to external financing?

(4.A firm has an asset turnover ratio of 2.0. Its plowback ratio is 50%, and it is all-equity financed. What must its profit margin be if it wishes to finance 10% growth using only internally generated funds?

(Chpt 18, Q23, LO3))

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