A Firm Wishes to Maintain an Internal Growth Rate of 4.5

question 64

Multiple Choice

A firm wishes to maintain an internal growth rate of 4.5 percent and a dividend payout ratio of 60 percent.The current profit margin is 7.5 percent and the firm uses no external financing sources.What must the total asset turnover be?

• A)0.98
• B)1.06
• C)1.21
• D)1.44
• E)1.59

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Definitions:

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A foundational principle that auditors must be unbiased and impartial with respect to the financial statements and other information they audit.

Sarbanes-Oxley Act

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