A Firm Wishes to Maintain an Internal Growth Rate of 11

question 40

Multiple Choice

A firm wishes to maintain an internal growth rate of 11 percent and a dividend payout ratio of 24 percent. The current profit margin is 7 percent and the firm uses no external financing sources. What is the total asset turnover (TAT) ?

• A) 0.87 times
• B) 0.90 times
• C) 1.01 times
• D) 1.15 times
• E) 1.86 times

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