Undertaker enterprises earns $0.17 in profit on every $1 of sales and has $0.67 in assets for every $1 of sales. the firm pays out 20 percent of its profits to its shareholders. what is the internal growth rate?

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Justus Mcfarland

Business

30 July, 03:06

Undertaker enterprises earns $0.17 in profit on every $1 of sales and has $0.67 in assets for every $1 of sales. the firm pays out 20 percent of its profits to its shareholders. what is the internal growth rate?

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Sherman · Answer 1

The internal growth rate is retained earning ($0.17n) divided by Total Assets ($.067n). Note that their will be a 20% cut from the equation $.17n so make sure to take out 20% from that value before dividing by Total Assets. The final equations are. 017n x. 017n (.2) = Earnings to Stakeholders or E. 017n - E = Retained Earnings or R R/.067n = Internal Growth Rate