High flyer, inc., wishes to maintain a growth rate of 16 percent per year and a debt-equity ratio of 0.90. the profit margin is 4.8 percent, and total asset turnover is constant at 1.08. what is the dividend payout ratio?

The dividend payout ratio is 46.19%.

We follow these steps in order to arrive at the

We begin with the DuPont identity of RoE.

DuPont Identity:

Now,  

And Debt Ratio is also expressed as:

where D/E represents the Debt-Equity Ratio.

Substituting the value of D/E ratio from the question in the debt ratio formula above we get,

----(1)

Substituting (1) in the equity multiplier formula above we get,

Substituting Equity Multiplier from above and the relevant numbers from the question in the DuPont identity we get,

The relationship between RoE and earnings growth rate g is given by the following formula:

, where p is the dividend payout ratio.

Plugging in the values in the formula above we get,

p = 0.461988304 or 46.19%

whats the

there was no passage listed but using the process of elimination i'd say it was d. the high economy would do the opposite. i don't see how low prices would affect it. high unemployment is possible but i feel d is the better answer.