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Internal Growth Rate

Joes Cookies Company has total assets of $1,200, total equity of $900 and ROA of 15% and a dividend payout ratio of 40%. What is the internal growth rath of Joes Cookie Company?

A-6.0%
B-7.8%
C-9.9%
D-11.2%
E-20.0%

Solution Preview

Hi there,

Here is your answer:

The internal growth rate is derived by taking a company's retained earnings and dividing by total ...

$2.19