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Rapidos main competitor, Superio AG, is part-way through a debt-reduction plan and aims to hit a net debt target of EUR215 million in early 2021.

Rapidos main competitor, Superio AG, is part-way through a debt-reduction plan and aims to hit a net debt target of EUR215 million in early 2021. The company has said it will then aim to distribute 55% of net profit to shareholders; a substantial increase on the current 30%. In the last financial year Superios turnover was EUR950 million, net profit margin was 5% and total asset turnover was 1.6. The company expects no change in these metrics within the next couple of years. How much will Superios more generous dividend policy impact its possible rate of growth, assuming that the companys banks and debt investors are unwilling to extend further funding? Explain your answer and show your calculations.

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