Is the firms target growth rate consistent with its other


A firm has decided that its optimal capital structure is 100% equity-financed. It perceives its optimal dividend policy to be a 75% payout ratio. Asset turnover is sales/assets = 0.5, the profit margin is 16%, 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? Yes No b. If not, what would asset turnover need to be to achieve its goals? (Do not round intermediate calculations. Round your answer to 3 decimal places.) c. How high would the profit margin need to be instead? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

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Financial Management: Is the firms target growth rate consistent with its other
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