Which of the following can affect a firm's sustainable rate of growth?
I.capital intensity ratio
II.profit margin
III.dividend policy
IV.debt-equity ratio
A)III only
B)I and III only
C)II, III, and IV only
D)I, II, and IV only
E)I, II, III, and IV

Question

Quizplus · Accepted Answer

All the options listed (capital intensity ratio, profit margin, dividend policy, and debt-equity ratio) can affect a firm's sustainable rate of growth. The capital intensity ratio impacts how much capital is needed for growth, profit margin affects how much net income is available to support growth, dividend policy influences how much of the profits are reinvested in the business, and the debt-equity ratio affects the firm's leverage and thus its ability to finance growth.

Which of the Following Can Affect a Firm's Sustainable Rate