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Decorative Interiors Wants to Maintain a Growth Rate of 7

Question 140

Multiple Choice

Decorative Interiors wants to maintain a growth rate of 7% without incurring any additional equity financing. The firm maintains a constant debt-equity ratio of .6, a total asset turnover ratio of .75,
And a profit margin of 6 percent. What must the dividend payout ratio be?


A) 2.7 %
B) 4.6 %
C) 7.2%
D) 9.1 %
E) 10.8 %

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