Green Caterpillar Garden Supplies Inc. has no debt in its capital structure and has $150 million in assets. Its sales revenues last year were $75 million with a net income of $5 million. The company distributed $1.60 million as dividends to its shareholders last year.

What is the firms self-supporting, growth rate? (Note: Do not round your intermediate calculations.)

4.60%

1.00%

2.32%

1.08%

Which of the following are assumptions of the self-supporting growth model? Check all that apply.

The firms liabilities and equity must increase at the same rate.

The firm pays no dividends.

The firm will not issue any new common stock next year.

The firm pays out a constant proportion of its earnings as dividends.