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Metronic has $190M in equity and $79M in debt and forecasts $30M in net income for the year. It currently pays dividends equal to 35%
Metronic has $190M in equity and $79M in debt and forecasts $30M in net income for the year. It currently pays dividends equal to 35% of its net income. You are analyzing a potential change in payout policy -an increase in dividends to 20% of net income. How would this change affect your internal and sustainable growth rates?Question: What is the internal growth rate of Metronic under the considered payout policy?
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