A Firm Has $20 Million in Equity and $10 Million

question 99

Multiple Choice

A firm has $20 million in equity and $10 million in debt.The firm forecasts that this year's net income will be $2.5 million.It currently pays dividends equal to 30% of its net income.If the firm decides to change its payout policy to 40% of net income,how would this change its internal growth rate?

• A)Decreases by 0.83%
• B)Decreases by 1%
• C)No change
• D)Increases by 0.83%
• E)Increases by 1%

---

Definitions:

Stop Smoking

The process of discontinuing the habit of inhaling tobacco smoke, often involves various support systems and techniques.

Developed Countries

Nations with advanced industrial economies, high living standards, and well-established infrastructures.

Job Positions

The roles or designations assigned to employees in an organization that define their responsibilities.