Problem $3-26$ Constraints on Growth

Tinsley, Incorporated, wishes to maintain a growth rate of $15$ percent per year and a

debt$-$equity ratio of $.2.$ The profit margin is $7\mathrm{.}1$ percent, and the ratio of total assets to

sales is constant at $1\mathrm{.}68.$

What dividend payout ratio is necessary to achieve this growth rate under these

constraints? $($A negative answer should be indicated by a minus sign. Do not round

intermediate calculations and enter your answer as a percent rounded to $2$ decimal

places, e$.$g$.,32\mathrm{.}16.)$

What is the maximum growth rate possible? $($Do not round intermediate calculations

and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.

Is a growth rate of $15$ percent possible?

Possible

Impossible