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

See similar textbooks

Similar questions

Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?
Ramble On Co. wishes to maintain a growth rate of 6 percent a year, a debt-equity ratio of 0.49, and a dividend payout ratio of 52 percent. The ratio of total assets to sales is constant at 1.34. What profit margin must the firm achieve?
McCormack co. Wishes to maintain a growth rate of 6 percent a year, a debt equity ratio of 0.49, and a dividend payout ratio of 58 percent. The ratio of total assets to sales is constant at 1.41. What profit margin must the firm achieve?
Jasmine Manufacturing wishes to maintain a sustainable growth rate of 10.25 percent a year, a debt-equity ratio of .46, and a dividend payout ratio of 29.5 percent. The ratio of total assets to sales is constant at 1.29. What profit margin must the firm achieve?
ACME Inc. has the following ratios: A0/S0- 1.3; LO/SO-0.40; profit margin-0.14; and the dividend payout ratio- .32, or 32%. Sales last year were $85 million. Assuming that these ratios will remain constant, use the AFN equation to determine the firm's self-supporting growth rate-in other words, the maximum growth rate ACME can achieve without having to employ non-spontaneous external funds. (Equation 9-2, which is 9-1, solving for g)
A firm wishes to maintain an sustainable growth rate of 12 percent and a dividend payout ratio of 50 percent. The ratio of total assets to sales is constant at 1, and the profit margin is 8.6 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be?
Need help. accounting
Gamgee Company wishes to maintain a growth rate of 11 percent per year, a debt-equity ratio of .75, and a dividend payout ratio of 25 percent. The ratio of total assets to sales is constant at .65. What profit margin must the firm achieve?
A firm wishes to maintain a growth rate of 11 percent and a dividend payout ratio of 64 percent. The ratio of total assets to sales is constant at 1, and the profit margin is 8.1 percent. If the firm also wishes to maintain a constant debt equity ratio, what must it be?
The Stieben Company has determined that the following will be true next year: T(ratio of total assets of sales)=1 P(net profit of margin)=5% d(dividend pay out ratio)=50% L(debt equity ratio)=1 a) What is Stieben's sustainable growth rate in sales? b)Can Stieben's actual growth rate in sales be different from its sustainable growth rate? Why or why not? c) How can Stieben change its sustainable growth?
ACME Inc. has the following ratios: A0*/S0 = 1.3; LO*/S0 = 0.35; profit margin = 0.12; and the dividend payout ratio = 37, or 37%. Sales last year were $85 million. Assuming that these ratios will remain constant, use the AFN equation to determine the firm's self-supporting growth rate-in other words, the maximum growth rate ACME can achieve without having to employ non-spontaneous external funds. (Equation 9-1)
Hi expert. Need help

SEE MORE QUESTIONS

Recommended textbooks for you

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

SEE MORE TEXTBOOKS

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?