What Is the Maximum Internal Growth Rate Consistent with Not

question 51

Multiple Choice

What is the maximum internal growth rate consistent with not requiring external funding for a firm reporting net income of $500,000,a dividend payout ratio of 40%,and total assets of $10 million?

• A) 2%
• B) 3%
• C) 5%
• D) 6%

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Definitions:

Elastic Material

Elastic material is a substance able to return to its original shape after being stretched or compressed, exemplified by rubber.

Stored Energy

Refers to potential energy that is held within an object or substance, awaiting release to perform work or generate force.

Adaptation

The process by which organisms become better suited to their environment, often leading to evolutionary change.

Compression

The process of reducing the volume or space something occupies, often by applying pressure.