General Accounting Southland Tours has a net income of $2 million this year.The book value of Southland Tours' common equity is $8million dollars. The company's dividend payout ratio is60% and is expected to remain this way. What isSouthland Tours' internal growth rate?a. 6%b. 9%c. 10%d. 15%

The fastest rate at which a business may increase its profits without obtaining outside funding is…

Answered: Southland Tours has a net income of $2…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 4P

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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%