High Flyer, Inc , wishes to maintain a growth rate of 13 percent per year and a debt equity ratio of 0 40 The profit margin is 6 percent, and total asset turnover is constant at 1 05 Is this growth rate possible To answer, determine what the dividend payout ratio must be How do you interpret the re...

We can find the payout ratio from the sustainable growth rate formula First we need the retu ...

High Flyer, Inc., wishes to maintain a growth rate of 13 percent per year and a debt-equity

Question:

High Flyer, Inc., wishes to maintain a growth rate of 13 percent per year and a debt-equity ratio of 0.40. The profit margin is 6 percent, and total is constant at 1.05. Is this growth rate possible? To answer, determine what the dividend payout ratio must be. How do you interpret the result?

Asset Turnover
Asset 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.