Donegal's Industrial Products Wishes to Maintain a Growth Rate of 6

Multiple Choice

Donegal's Industrial Products wishes to maintain a growth rate of 6 percent a year, a debt-equity ratio of .45, and a dividend payout ratio of 30 percent.The ratio of total assets to sales is constant at 1.25.What profit margin must the firm achieve?

A) 4.68 percent
B) 5.29 percent
C) 6.33 percent
D) 6.97 percent
E) 8.19 percent