Homework answers / question archive / Assume that an average firm in the office supply business has a 6% after-tax profit margin, a 40% debt/asset ratio, a total assets turnover of 2 times, and a dividend payout ratio of 40%

Assume that an average firm in the office supply business has a 6% after-tax profit margin, a 40% debt/asset ratio, a total assets turnover of 2 times, and a dividend payout ratio of 40%

Business

Share With

Assume that an average firm in the office supply business has a 6% after-tax profit margin, a 40% debt/asset ratio, a total assets turnover of 2 times, and a dividend payout ratio of 40%. Is it true that if such a firm is to have any sales growth, it will be forced either to borrow (take on debt) or sell common stock? Discuss.