The internal growth rate of a firm is best described as the:
A)minimum growth rate achievable assuming a 100 percent retention ratio.
B)minimum growth rate achievable if the firm maintains a constant equity multiplier.
C)maximum growth rate achievable excluding external financing of any kind.
D)maximum growth rate achievable excluding any external equity financing while maintaining a constant debt-equity ratio.
E)maximum growth rate achievable with unlimited debt financing.

Question

Quizplus · Accepted Answer

The internal growth rate of a firm is the maximum growth rate a firm can achieve without resorting to external financing, which means it relies solely on its own operations and reinvested earnings to finance any growth.

The Internal Growth Rate of a Firm Is Best Described