Debt-equity ratio be if firm wishes to keep ratios constant

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Reference no: EM13950204

A firm wishes to maintain a growth rate of 8 percent and a dividend payout ratio of 62 percent. The ratio of total assets to sales is constant at 1, and the profit margin is 10 percent. What must the debt-equity ratio be if the firm wishes to keep these ratios constant?

A. .05

B. .40

C. .55

D. .60

E. .95

Reference no: EM13950204

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