The Soccer Shoppe has a 9 percent return on assets and a 25 percent payout ratio.What is its internal growth rate?
A)4.72 percent
B)5.08 percent
C)5.49 percent
D)6.23 percent
E)7.24 percent

Name: The Soccer Shoppe has a 9 percent return on assets and a 25 percent payout ratio.What is its internal growth rate? A)4.72 percent B)5.08 percent C)5.49 percent D)6.23 percent E)7.24 percent
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Retention ratio = 1 - 0.25 = 0.75Internal growth rate = (0.09 × 0.75)/[1 - (0.09 × 0.75)] = 7.24 percent

The Soccer Shoppe Has a 9 Percent Return on Assets