Tinsley. Incorporated, wishes to maintain a growth rate of 14 percent per year and a debt-equity ratio of 4. The profit margin is 6.7 percent, and the ratio of total assets to sales is constant at 1.64. What dividend payout ratio is necessary to achieve this growth rate under these constraints? (A negative answer should be Indicated by a minus sign. Do not round Intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32.) Payout ratio -106 %
Tinsley. Incorporated, wishes to maintain a growth rate of 14 percent per year and a debt-equity ratio of 4. The profit margin is 6.7 percent, and the ratio of total assets to sales is constant at 1.64. What dividend payout ratio is necessary to achieve this growth rate under these constraints? (A negative answer should be Indicated by a minus sign. Do not round Intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32.) Payout ratio -106 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject :- Accounting
Transcribed Image Text:Tinsley. Incorporated, wishes to maintain a growth rate of 14 percent per year and a
debt-equity ratio of .4. The profit margin is 6.7 percent, and the ratio of total assets to
sales is constant at 1.64.
What dividend payout ratio is necessary to achieve this growth rate under these
constraints? (A negative answer should be Indicated by a minus sign. Do not round
Intermediate calculations and enter your answer as a percent rounded to the nearest
whole number, e.g., 32.)
Payout ratio
Is this growth rate possible?
Yes
No
-106 %
What is the maximum sustainable growth rate possible given these constraints? (Do not
round Intermediate calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
Sustainable growth rate
0.34 %
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