Saddle and Bridle Reported a Profit Margin of 12 Percent

Multiple Choice

Saddle and Bridle reported a profit margin of 12 percent, total asset turnover ratio of 2 times, debt-to-equity ratio of 1.9 times, net income of $1 million, and dividends paid to common stockholders of $250,000. The firm has no preferred stock outstanding. What is Saddle and Bridle's internal growth rate?

A) 13.64 percent
B) 18.00 percent
C) 24.00 percent
D) 21.95 percent