Southland Tours has a net income of $2 million this year. The book value of Southland Tours' common equity is $8 million dollars. The company's dividend payout ratio is 60% and is expected to remain this way. What is Southland Tours' internal growth rate? a. 6% b. 9% c. 10% d. 15%
Southland Tours has a net income of $2 million this year. The book value of Southland Tours' common equity is $8 million dollars. The company's dividend payout ratio is 60% and is expected to remain this way. What is Southland Tours' internal growth rate? a. 6% b. 9% c. 10% d. 15%
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 4P
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General Accounting

Transcribed Image Text:Southland Tours has a net income of $2 million this year.
The book value of Southland Tours' common equity is $8
million dollars. The company's dividend payout ratio is
60% and is expected to remain this way. What is
Southland Tours' internal growth rate?
a. 6%
b. 9%
c. 10%
d. 15%
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