A Firm Wishes to Maintain a Growth Rate of 12

question 14

Multiple Choice

A firm wishes to maintain a growth rate of 12% per year and a dividend payout of 10%. The ratio of total assets to sales is constant at 1.5, and profit margin is 10%. What must be the debt-to-equity ratio?

• A) 0.52
• B) 0.67
• C) 0.79
• D) 0.84

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Definitions:

Evolutionary Perspective

The theory that seeks to identify behavior that is a result of our genetic inheritance from our ancestors.

Mate Selection

The process of choosing a partner for reproduction and companionship, influenced by biological, psychological, and social factors.

Fatuous Love

A type of love characterized by commitment based on passion without the intimacy component, often considered to be shallow.

Intimacy

The feeling of being emotionally close to and connected with another individual, often involving a sense of shared understanding and affection.