Use afn model to compute the maximum growth rate

Reference no: EM1356845

ABC has the following ratios: A*/so=1.6, L*/so=0.4, profit margin=0.10 and dividend payout ratio=0.45. Sales last year were $100 million. Assuming the ratios remain constant, use the AFN model to determent the maximum growth rate the firm can achieve without having to employ external funds.

Reference no: EM1356845

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Use afn model to compute the maximum growth rate : ABC has the following ratios: A*/so=1.6, L*/so=0.4, profit margin=0.10 and dividend payout ratio=0.45. Sales last year were 100 million dollar. Suppose the ratios remain constant and apply AFN model to determent the maximum growth rate

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