Question

a firm wishes to maintain an internal growth rate of 7.6 percent and a dividend payout ratio of 30 percent. the current profit margin is 6 percent, and the firm uses no external financing sources. what must total asset turnover be?

Answer 1

The asset turnover is 1.809 times.

Calculation of an asset turnover:

Since A business wants to keep its internal growth rate at 7.6% and dividend payout ratio at 30%. 6% is the current profit margin.

So,

Growth rate = ROE × (1 - dividend payout ratio)

7.6% = ROE × (1 - 0.30)

ROE = 0.1085

Now the asset turnover is

= 0.1085÷ 0.06

= 1.809 times

To know more about turnover from the given link

https://brainly.com/question/14170257

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