Question

Last year, a firm reported total assets of $1,619,000, sales of $739,000, and net income of $147,800. The firm paid $59,120 in dividends and intends to hold its dividend payout ratio constant. At what annual rate can the firm grow without having to raise external funds?

Name: last year a firm reported total assets of 1619000 sales of 739000 and net income of 147800 the firm paid 59120 in dividends and intends to hold its dividend payout ratio constant at what ann 08369
Uploaded: 2023-08-10T23:06:04-08:00
Duration: 2 min 43 s
Channel: Madhur L
Description: last year a firm reported total assets of 1619000 sales of 739000 and net income of 147800 the firm paid 59120 in dividends and intends to hold its dividend payout ratio constant at what ann 08369

          Last year, a firm reported total assets of $1,619,000, sales of $739,000, and net income of $147,800. The firm paid $59,120 in dividends and intends to hold its dividend payout ratio constant. At what annual rate can the firm grow without having to raise external funds?

Added by Jon O.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Madhur L

08/10/2023

Step 1

The dividend payout ratio is calculated as the dividends paid divided by the net income. \[ \text{Dividend Payout Ratio} = \frac{\text{Dividends Paid}}{\text{Net Income}} = \frac{59,120}{147,800} \approx 0.399 \] Show more…

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Last year, a firm reported total assets of $1,619,000, sales of $739,000, and net income of $147,800. The firm paid $59,120 in dividends and intends to hold its dividend payout ratio constant. At what annual rate can the firm grow without having to raise external funds?