A Firm Reported a Profit Margin of 8

Multiple Choice

A firm reported a profit margin of 8.5 percent, total asset turnover of 0.85 times, debt-to-equity ratio of 0.90 times, net income of $550,000, and dividends paid to common stockholders of $100,000. The firm has no preferred stock outstanding. What is the firm's internal growth rate?

A) 3.61 percent
B) 6.29 percent
C) 5.91 percent
D) 11.04 percent