The most recent financial statements for Live Co. are shown here:

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. No external equity financing is possible. What is the internal growthrate?

Transcribed Image Text:

Income Statement Balance Sheet Sales Costs Taxable income Taxes (40%) $17,500 Current assets $10,400 Debt $17,500 21,650 $39,150 11,800 Fixed assets 5,700 Total 2.280 3,420 28,750 Equity $39,150 Total Net income