QUESTION 21

1. Given the financial statements below for Dragonfly Enterprises, what would be the internal growth rate (IGR) if the company decided to change the dividend payout rate to 49.6%? Enter your answer as the nearest tenth of a percent (e.g., 12.3), but do not include the % sign.

   Dragonfly Enterprises
   Income Statement ($ Million)		2011
   Sales		370
   Cost of Goods Sold		226
   Selling, General, & Admin Exp.		62
   Depreciation		20
   Earnings Before Interest & Taxes		62
   Interest Expense		12
   Taxable Income		50
   Taxes at 40%		20
   Net Income		30
   Balance Sheets as of 12-31
   Assets	2010	2011
   Cash	10	10
   Account Receivable	46	50
   Inventory	43	45
   Total Current Assets	99	105
   Net Fixed Assets	166	195
   Total Assets	265	300
   Liabilities and Owners Equity	2010	2011
   Accounts Payable	26	30
   Notes Payable	0	0
   Total Current Liabilities	26	30
   Long-Term Debt	140	150
   Common Stock	22	22
   Retained Earnings	77	98
   Total Liab. and Owners Equity	265	300