A Firm's Profit Margin Is 5%, Its Debt/assets Ratio Is

question 28

True/False

A firm's profit margin is 5%, its debt/assets ratio is 56%, and its dividend payout ratio is 40%.If the firm is operating at less than full capacity, then sales could increase to some extent without the need for external funds, but if it is operating at full capacity with respect to all assets, including fixed assets, then any positive growth in sales will require some external financing.

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Definitions:

Zygote

The initial cell formed when a new organism is produced by sexual reproduction, created by the union of sperm and egg.

Sporophyte

The stage in the plant life cycle that arises from the fertilization of gametes and produces spores for reproduction, distinct from the gametophyte generation.

Gametophyte

The haploid stage in the life cycle of plants that produces gametes, or sex cells, through mitosis.

Gametophyte Generation

The haploid, gamete-producing phase in the life cycle of plants and algae that alternates with the sporophyte generation.