A0s0 16 l0s0 04 profit margin 010 and dividend payout


The Barnsdale Corporation has the following ratios: A0*/S0 = 1.6; L0*/S0 = 0.4; profit margin = 0.10; and dividend payout ratio = 0.45, or 45%. Sales last year were $100 million. Assuming that these ratios will remain constant, use the AFN equation to determine the firm’s self-supporting growth rate—in other words, the maximum growth rate Barnsdale can achieve without having to employ no spontaneous external funds.

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Financial Management: A0s0 16 l0s0 04 profit margin 010 and dividend payout
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