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1. Sal’s Pizza has a dividend payout ratio of 10 percent. The firm does not want to issue additional equity shares but does want to maintain its current debt-equity ratio and its current dividend policy. The firm is profitable. Which one of the following defines the maximum rate at which this firm can grow? ,A. internal growth rate ? (1 – 0.10),B. sustainable growth rate ? (1 – 0.10),C. internal growth rate,D. sustainable growth rate,E. zero percent, ,2. Assume that Fake Stone, Inc. is operating at full capacity. Also assume that all costs, net working capital, and fixed assets vary directly with sales. The debt-equity ratio and the dividend payout ratio are constant. What is the pro forma net fixed asset value for next year if sales are projected to increase by 7.5 percent? ,A. $19,800,B. $21,070,C. $23,600,D. $24,240,E. $26,810, , ,3. Hungry Howie’s is currently operating at 78 percent of capacity. What is the full-capacity level of sales? ,A. $21,106.00,B. $21,580.62,C. $22,179.49,D. $24,506.17,E. $25,301.91, ,4. Assume the total cost of a college education will be $300,000 when your child enters college in 16 years. You presently have $75,561 to invest. What rate of interest must you earn on your investment to cover the cost of your child’s college education? ,A. 7.75 percent,B. 8.50 percent,C. 9.00 percent,D. 9.25 percent,E. 9.50 percent,