Which of the following is true regarding the Internal Growth Rate?
A) It represents the maximum possible growth rate a firm can achieve without external equity financing while maintaining a constant debt-equity ratio.
B) It represents the maximum possible growth rate a firm can achieve without external financing of any kind.
C) It represents the potential growth of the company based only on internal management controls.
D) It represents the potential growth of the company after the addition of fixed assets.
E) It represents the potential growth of the company if more common stock is issued and sold.
Correct Answer:
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