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I need help understanding how to find the answers for 19 & 20. I know that the circled answers are correct but I dont understand
I need help understanding how to find the answers for 19 & 20. I know that the circled answers are correct but I dont understand how to find the answers.
19. A firm wants a sustainable growth rate of 3.23 percent while maintaining a dividend payout ratio of 29 percent and a profit margin of 8 percent. The firm has a capital intensity ratio of 2. What is the debt-equity ratio that is required to achieve the firm's desired rate of growth? a. 0.71 times b.) 0.10 times 0.90 times d. 0.55 times e. 0.21 times C. 20. The Green Giant has a 5 percent profit margin and a 36 percent dividend payout ratio. The total asset turnover is 1.4 times and the equity multiplier is 1.4 times. What is the sustainable rate of growth? 9.37% b. 6.69% a. C. 14.11% d. 1.96% e. 9.80%Step by Step Solution
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