Quiz Ch 16 – T/F Sales Growth and External Financing Based on Profit Margin, Debt Ratio, and Dividend Payout

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: When a firm operates below full capacity, it can accommodate sales growth without external funds, considering a 5% profit margin, 56% debt ratio, and 40% dividend payout. However, at full capacity across all assets, including fixed assets, any sales growth will require external financing.

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