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Dante Co. wishes to maintain a growth rate of 10.2 percent a year, a debt-equity ratio of .9, and a dividend payout ratio of 20 percent. The ratio of total assets to sales is constant at .81. What profit margin must the firm achieve?

Dante Co. wishes to maintain a growth rate of 10.2 percent a year, a debt-equity ratio of .9, and a dividend payout ratio of 20 percent. The ratio of total assets to sales is constant at .81. What profit margin must the firm achieve?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What profit margin must the firm achieve ?

Dante Co. wishes to maintain a growth rate of 10.2 percent a year, a debt-equity ratio of .9, and a dividend payout ratio of 20 percent. The ratio of total assets to sales is constant at .81. What profit margin must the firm achieve?
Transcribed Image Text:Dante Co. wishes to maintain a growth rate of 10.2 percent a year, a debt-equity ratio of .9, and a dividend payout ratio of 20 percent. The ratio of total assets to sales is constant at .81. What profit margin must the firm achieve?
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