Question
i have one question about corporate finance 123 Inc has a profit margin of 15%. Its total asset turnover ratio is 2 and its dividend
i have one question about corporate finance
123 Inc has a profit margin of 15%. Its total asset turnover ratio is 2 and its dividend payout ratio is 60%. What is the company's internal growth rate?
from the slide, the formula should be:
ROA*retention ratio= 15%*2*(1-60%)=12%
but the answer is 12%/(1-12%)=13.64%, i don't know why?
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
16th edition
1337902608, 978-1337902601
