A firm has an asset turnover ratio of 2.0. Its plowback ratio is 50%, and it is
Question:
A firm has an asset turnover ratio of 2.0. Its plowback ratio is 50%, and it is all-equity-financed. If the profit margin of the firm is 6%, what is the maximum payout ratio that will allow it to grow at 8% without resorting to external financing?
Asset TurnoverAsset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-1259722615
9th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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