What profit margin must the firm achieve ? Dante Co. wishes to maintain a growth rateof 10.2 percent a year, a debt-equity ratioof .9, and a dividend payout ratio of 20percent. The ratio of total assets to sales isconstant at .81. What profit margin mustthe firm achieve?

To determine the profit margin required for Dante Co. to achieve its target growth rate, we can use…

Answered: Dante Co. wishes to maintain a growth…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 6P

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Dante Co. wishes to maintain a growth rate of 10.2 percent a year, a debt-equity ratio of .9, and a dividend payout ratio of 20 percent. The ratio of total assets to sales is constant at .81. What profit margin must the firm achieve?