All else equal, a firm that utilizes assets inefficiently will have a higher sustainable growth rate than a firm that does not.

Question

Quizplus · Accepted Answer

A firm that utilizes assets inefficiently will typically have a lower return on equity (ROE), which in turn lowers its sustainable growth rate, as the sustainable growth rate is directly influenced by the efficiency in asset utilization and profitability.

All Else Equal, a Firm That Utilizes Assets Inefficiently Will