Internal Growth Rate
Leash N Collar reported a profit margin of 8%, total asset turnover ratio of 1.5 times, debt-to-equity ratio of 0.75 times, net income of $400,000, and dividends paid to common stockholders of $200,000. The firm has no preferred stock outstanding. What is Leash N Collar's internal growth rate? (Do not round intermediate steps.)
a. 7.3333%
b. 6.383%
c. 11.5%
d. 8.6957%