Walmart wants to achieve a sustainable growth rate of 3.63% and it wants to keep a same dividend payout ratio of 37% and a profit margin of 6%. Suppose that the firm has a capital intensity ratio of 2. What is the debt to equity ratio that is needed to arrive at the firm's desired rate of growth?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Walmart wants to achieve a sustainable growth rate of 3.63% and it wants to keep a same dividend payout ratio
of 37% and a profit margin of 6%. Suppose that the firm has a capital intensity ratio of 2. What is the debt to
equity ratio that is needed to arrive at the firm's desired rate of growth?
Transcribed Image Text:Walmart wants to achieve a sustainable growth rate of 3.63% and it wants to keep a same dividend payout ratio of 37% and a profit margin of 6%. Suppose that the firm has a capital intensity ratio of 2. What is the debt to equity ratio that is needed to arrive at the firm's desired rate of growth?
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