Question
Rowan Company has a net profit margin of 8.3 percent, debt ratio of 50 percent, total assets of $5,087,200, sales of $6,738,600, and a dividend
Rowan Company has a net profit margin of 8.3 percent, debt ratio of 50 percent, total assets of $5,087,200, sales of $6,738,600, and a dividend payout ratio of 65 percent. The firms management desires a sustainable growth rate (SGR) of 12 percent but does not wish to change the companys level of debt or its payout ratio. What will the firms new net profit margin have to be in order to achieve the desired growth rate? (Round intermediate calculation to 2 decimal places, e.g. 5.25 and final answer to 1 decimal place, e.g. 17.5%.) Net profit margin =____________%
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