The most recent financial statements for Live Co. are shown here:

Income Statement		Balance Sheet
Sales	$4,100	Current assets	$4,358	Debt	$8,713
Costs	2,706	Fixed assets	10,669	Equity	6,314
Taxable income	$1,394	Total	$15,027	Total	$15,027
Taxes (34%)	474
Net income	$920

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 28 percent dividend payout ratio. No external equity financing is possible.

Required:

What is the internal growth rate? (Do not round your intermediate calculations.)

rev: 09_17_2012

Multiple Choice

• 11.72%

• 4.51%

• 4.71%

• 1.74%

• 4.61%