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Your company would like to determine the growth rate in sales that will allow it to expand as much as possible without having to
Your company would like to determine the growth rate in sales that will allow it to expand as much as possible without having to issue external capital (that is, its AFN will be equal to 0). Assume that you have gathered the data listed below for the firm. Given this information, and using the AFN formula, determine the maximum growth rate of sales that the firm can sustain without having to issue external capital. Capital Intensity Ratio = 1.50 Profit Margin = 8% Dividend Payout Ratio = 50% Current Sales = $200,000 Spontaneous Liabilities = $20,000 O 2.94% O 3.32% O 1.82% 2.56% O 2.19%
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