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Item 18

Item 18

Time Remaining 2 hours 43 minutes 45 seconds

02:43:45

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

Income Statement		Balance Sheet
Sales	$4,500	Current assets	$4,783	Debt	$9,563
Costs	2,970	Fixed assets	11,710	Equity	6,930
Taxable income	$1,530	Total	$16,493	Total	$16,493
Taxes (33%)	505
Net income	$1,025

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 40 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

• 3.77%

• 3.97%

• 9.74%

• 2.55%

• 3.87%