Major Manuscripts, Inc. 2009 Income Statement

Net sales

7,600

Cost of goods sold

6,665

Depreciation

190

Earnings before interest and taxes

745

Interest paid

20

Taxable Income

726

Taxes

253

Net income

473

Dividends

213

Major Manuscripts, Inc. 2009 Balance Sheet

2009

2009

Cash

2,200

Accounts payable

1,700

Accounts rec.

860

Long-term debt

260

Inventory

2,300

Common stock

2,700

Total

5,360

Retained earnings

3,930

Net fixed assets

3,230

Total assets

8,590

Total liabilities & equity

8,590

Major Manuscripts, Inc. does not want to incur any additional external financing. The dividend payout ratio is constant. What is the firm's maximum rate of growth?

3.15%

2.54

11.11

3.12

4.08