A Firm Has $50 Million in Equity and $20 Million

question 64

Multiple Choice

A firm has $50 million in equity and $20 million of debt, it pays dividends of 30% of net income, and has a net income of $10 million. What is the firm's internal growth rate?

• A) 9%
• B) 10%
• C) 11%
• D) 12%

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Definitions:

Ethical Problems

Issues or situations that involve conflicts between moral imperatives, requiring individuals to make a moral judgment.

Unethical Business Practices

Business actions that are illegal, immoral, or just outside the bounds of what is considered acceptable behavior in the business realm.

Innocent People

Individuals who are not guilty of a crime or any wrongdoing for which they might be accused.

Critical Thinker

A person who engages in the analysis, synthesis, and evaluation of information gathered from observation, experience, reflection, reasoning, or communication.