Marcie's Mercantile Wants to Maintain Its Current Dividend Policy, Which

Multiple Choice

Marcie's Mercantile wants to maintain its current dividend policy, which is a payout ratio of 40 percent. The firm does not want to increase its equity financing but are willing to maintain its current
Debt-equity ratio. Given these requirements, the maximum rate at which Marcie's can grow is equal
To:

A) 40 percent of the internal rate of growth.
B) 60 percent of the internal rate of growth.
C) The internal rate of growth.
D) The sustainable rate of growth.
E) 60 percent of the sustainable rate of growth.