Question: Need help on this question, Just part C (PROFIT MARGIN) Problem 18-21 Sustainable Growth (LO3) A firm has decided that its optimal capital structure is
Need help on this question, Just part C (PROFIT MARGIN)

Problem 18-21 Sustainable Growth (LO3) A firm has decided that its optimal capital structure is 100% equity-financed. It perceives its optimal dividend policy to be a 40% payout ratio. Asset turnover is sales/assets = 0.6, the profit margin is 10%, and the firm has a target growth rate of 4%. a-1. Calculate the sustainable growth rate. (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) a-2. Is the firm's target growth rate consistent with its other goals? b. If the firm's target growth rate is not consistent with its other goals, what would asset turnover need to be to achieve its goals? (Do not round intermediate calculations. Round your answer to 3 decimal places.) .c. If the firm's target growth rate is not consistent with its other goals, how high would the profit margin need to be to achieve its goals? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) 5 a-1. 3.6 % a-2. No Sustainable growth rate Is the firm's target growth rate consistent with its other goals? Asset turnover Profit margin b. 0.666 C. %
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