Which one of the following is the maximum growth rate that a firm can achieve without changing the D/E ratio? The Sustainable growth rate The Internal growth rate O The DuPont Identity rate O The External growth rate Crochet Supplies, Inc. has a total asset turnover rate of 1.4, an equity multiplier of 1.3, a profit margin of 7 percent, a retention ratio (b) of 0.6, and total assets of $100,000. What is Crochet Supplies' ROE? 10 Must-Have CROCHET SUPPLIES WWW.SPARKLESOFSUNSHINE.COM 16.44 percent 11.76 percent 12.74 percent 8.23 percent As we just said, Crochet Supplies has a total asset turnover rate of 1.4, an equity multiplier of 1.3, a profit margin of 7 percent, a retention ratio (b) of 0.6, and total assets of $100,000. Using the same data for Crochet Supplies plus Net Income is $9,800, what is Crochet's Internal Growth Rate? Hint: First find Crochet's ROA. Internal Growth Rate Internal growth rate is a formula for calculating the maximum growth rate a firm can achieve without external financing of any kind. ROA X b Internal Growth Rate (IGR) 1 - (ROA X b) I ROA = Return on Assets I b = Retention ratio =1 - dividend payout ratio and Return on Equity = Net Income/Total Shareholder's Equity O 7.25% O 5.88% 9.8% 6.25%