Calculate the Rate at Which a Firm Can Grow Without

question 62

Multiple Choice

Calculate the rate at which a firm can grow without changing its leverage if its payout ratio is 70%,equity outstanding at the beginning of the year is $940,000,and its net income for the year is $162,000.

• A) 5.17%
• B) 11.67%
• C) 14.00%
• D) 16.67%

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Definitions:

Manufacturing Firm

A business entity that produces goods using raw materials and machinery in a systematic process.

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