General accounting R. N. C., Inc., desires a sustainable growth rate of 3.19percent while maintaining a 47 percent dividendpayout ratio and a profit margin of 8 percent. Thecompany has a capital intensity ratio of 1.9. Whatequity multiplier is required to achieve the company'sdesired rate of growth?

Step 1: Equity MultiplierThe equity multiplier is a financial ratio to measure the relationship…

Answered: R. N. C., Inc., desires a sustainable…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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R. N. C., Inc., desires a sustainable growth rate of 3.19 percent while maintaining a 47 percent dividend payout ratio and a profit margin of 8 percent. The company has a capital intensity ratio of 1.9. What equity multiplier is required to achieve the company's desired rate of growth?