Growth and DebtEquity Ratio A firm wishes to maintain a growth rate of 14 percent and a

Question:

Growth and Debt—Equity Ratio A firm wishes to maintain a growth rate of 14 percent and a dividend payout ratio of 40 percent. The ratio of total assets to sales is constant at .8, and profit margin is 8.5 percent. If the firm also wishes to maintain a constant debt—equity ratio, what must it be?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...