The maximum growth rate for a ﬁrm which maintains a constant debt-equity ratio and which avoids additional external equity ﬁnancing is called the _____ growth rate.

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The maximum growth rate for a firm which maintains a constant debt-equity ratio and avoids additional external equity financing is called the sustainable growth rate. This rate is the highest growth rate that a company can achieve without having to raise additional equity capital and without creating financial strain on the company's finances. The sustainable growth rate takes into account the firm's retained earnings, which are reinvested back into the business, and the amount of debt the firm has relative to equity.

The Maximum Growth Rate for a ﬁRm Which Maintains a Constant