A firm has Net Income of $60,800 and has Total Assets of $601,991. The firm’s payout...

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

Expert Solution

jeff jeffy answered 3 months ago

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