The most recent financial statements for live co are shown

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The most recent financial statements for Live Co. are shown here:

Income Statement

Balance Sheet

Sales

$13,250

Current assets

$10,400

Debt

$51,000

Costs

9,480

Fixed assets

28,750

Equity

21,650

Taxable income

$3,770

Total

$39,150

Total

$39,150

Taxes (34%)

1,508





Net income

$2,262





Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. No external equity financing is possible.

Required:

What is the internal growth rate?

  1. 4.11%
  2. 7.89%
  3. 1.76%
  4. 4.21%
  5. 4.31%

Reference no: EM13481378

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