What Amount of Debt Should a Firm Include in Its

question 23

Multiple Choice

What amount of debt should a firm include in its financing mix in order to achieve a sustainable growth rate of 9% while maintaining a 40% dividend payout, a 10% profit margin, and an asset turnover of 1.5?

• A) 66.67% debt
• B) 60.00% debt
• C) 50.00% debt
• D)Zero debt

---

Definitions:

Sandwich Generation

Middle-aged adults who are taking responsibility for both dependent children and parents at the same time, and being sandwiched by these obligations.

Human Relations

The study and management of how people interact in professional settings to increase productivity, satisfaction, and organizational effectiveness.

Talents and Abilities

Inherent skills and capacities that individuals possess, which can be developed and applied to various tasks or activities.

Productivity

The measurement of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.