A Firm Has a Debt Ratio of 45 Percent, Capital

Multiple Choice

A firm has a debt ratio of 45 percent, capital intensity ratio is 1.3 times, profit margin is 10 percent, and dividend payout ratio is 30 percent. Calculate the sustainable growth rate for the firm.

A) 1.56 percent
B) 2.96 percent
C) 3.05 percent
D) 4.79 percent