Question

Suprenuk, Inc., wishes to maintain a growth rate of 15 percent per year and a debt-equity ratio of .6. Profit margin is 6.3 percent and the ratio of total assets to sales is constant at 1.60. |

What dividend payout ratio is necessary to achieve this growth
rate under these constraints? |

What is the maximum growth rate possible? |

Answer #1

Calculate the payout ratio and maximum growth rate as follows:

Formulas:

Suprenuk, Inc., wishes
to maintain a growth rate of 14 percent per year and a debt-equity
ratio of .4. Profit margin is 7.2 percent and the ratio of total
assets to sales is constant at 1.69.
What dividend payout
ratio is necessary to achieve this growth rate under these
constraints? (A negative answer should be indicated by a
minus sign. Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g.,
32.16.)...

Sig, Inc., wishes to maintain a growth rate of 13 percent per
year and a debt-equity ratio of .3. The profit margin is 7 percent,
and the ratio of total assets to sales is constant at 1.67.
What dividend payout ratio is necessary to achieve this growth
rate under these constraints? (A negative answer should be
indicated by a minus sign. Do not round intermediate calculations
and enter your answer as a percent rounded to the nearest whole
number, e.g.,...

High Flyer, Inc., wishes to maintain a growth rate of 15.75
percent per year and a debt–equity ratio of .85. The profit margin
is 4.9 percent, and total asset turnover is constant at 1.09.
What is the dividend payout ratio? (A negative answer
should be indicated by a minus sign. Do not round intermediate
calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
Dividend payout ratio
%
What is the maximum...

Sig, Inc., wishes to maintain a growth rate of 12 percent per
year and a debt-equity ratio of .43. The profit margin is 5.9
percent, and the ratio of total assets to sales is constant at
1.80. What dividend payout ratio is necessary to achieve this
growth rate under these constraints?

Fulkerson Manufacturing wishes to maintain a sustainable growth
rate of 8.5 percent a year, a debt–equity ratio of .53, and a
dividend payout ratio of 26 percent. The ratio of total assets to
sales is constant at 1.22.
What profit margin must the firm achieve in order to meet its
growth rate goal? (Do not round intermediate calculations
and enter your answer as a percent rounded to 2 decimal places,
e.g., 32.16.)
Profit margin
%

Fulkerson Manufacturing wishes to maintain a sustainable growth
rate of 8.5 percent a year, a debt–equity ratio of .53, and a
dividend payout ratio of 26 percent. The ratio of total assets to
sales is constant at 1.22.
What profit margin must the firm achieve in order to meet its
growth rate goal? (Do not round intermediate calculations
and enter your answer as a percent rounded to 2 decimal places,
e.g., 32.16.)
Profit margin
%

Fulkerson Manufacturing wishes to maintain a sustainable growth
rate of 10 percent a year, a debt–equity ratio of .37, and a
dividend payout ratio of 34 percent. The ratio of total assets to
sales is constant at 1.38.
What profit margin must the firm achieve in order to meet its
growth rate goal? (Do not round intermediate calculations
and enter your answer as a percent rounded to 2 decimal places,
e.g., 32.16.)
Profit margin
%

McCormac Co. wishes to maintain a growth rate of 6 percent a
year, a debt-equity ratio of 0.37, and a dividend payout ratio of
66 percent. The ratio of total assets to sales is constant at 1.33.
Required: What profit margin must the firm achieve? (Do not round
your intermediate calculations.) rev: 09_17_2012 Multiple Choice
4.71% 16.41% 16.16% 9.24% 8.43%

A firm wishes to maintain a growth rate of 8 percent a year, a
debt-equity ratio of 0.34, and a dividend payout ratio of 52
percent. The ratio of total assets to sales is constant at 1.3.
What profit margin must the firm achieve?
Rentention ratio = 1-0.52 = 0.48
Sustainable growth rate = 0.08 = (ROE) x 0.48) / (1- (ROE x 0.48)
ROE = 0.1543
Return on equity = 0.1543 = PM x (1/1.3) x (1+0.34) profit margin...

A firm wishes to maintain an internal growth rate of 9.75
percent and a dividend payout ratio of 43 percent. The current
profit margin is 6.5 percent and the firm uses no external
financing sources. What must total asset turnover be? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)

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