In: Finance
A firm has Net Income of $60,800 and has Total Assets of $601,991. The firm’s payout ratio is 60 percent. What is the firm’s Internal Growth rate? Can the firm grow at 4 percent without raising external funds and why? (Hint: Need to first compute ROA).
Group of answer choices
6.45 percent; No, because 4 percent < Internal Growth Rate
6.45 percent; Yes, because 4 percent < Internal Growth Rate
4.21 percent; Yes, because 4 percent < Internal Growth Rate
4.21 percent; No, because 4 percent < Internal Growth Rate
No idea