Metronic firm has $70M in equity and $30M in debt and forecasts $14M in net income for the year. It currently pays dividends equal to 20% of its net income. You are analyzing a potential change in payout policy -an increase in dividends to $30% of net income. How would this change affect your internal and sustainable growth rates?

Answer rating: 100% (QA)

Currently Retention ratio1payout ratio 102 08 Total assetsdebtequity ... View the full answer