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

Income Statement		Balance Sheet
Sales	$3,900	Current assets	$4,145	Debt	$8,288
Costs	2,574	Fixed assets	10,149	Equity	6,006
Taxable income	$1,326	Total	$14,294	Total	$14,294
Taxes (35%)	464
Net income	$862

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 26 percent dividend payout ratio. No external equity financing is possible.

Required:

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

Multiple Choice

• 4.57%

• 1.59%

• 4.67%

• 4.77%

• 11.88%