McCormac Co. wishes to maintain a growth rate of 8 percent a year, a debt-equity ratio of 0.51, and a dividend payout ratio of 58 percent. The ratio of total assets to sales is constant at 1.29. Required: What profit margin must the firm achieve?

McCormac Co. wishes to maintain a growth rate of 8 percent a year, a debt-equity ratio of 0.51, and a dividend payout ratio of 58 percent. The ratio of total assets to sales is constant at 1.29. Required: What profit margin must the firm achieve?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

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Accounting Required: what profit margin must the firm achive

McCormac Co. wishes to maintain a growth rate
of 8 percent a year, a debt-equity ratio of 0.51,
and a dividend payout ratio of 58 percent. The
ratio of total assets to sales is constant at 1.29.
Required: What profit margin must the firm
achieve?

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