Which one of these is a requirement if the sustainable growth rate is to exceed the internal growth rate?
A) Net working capital $0
B) Total debt $0
C) Dividend ratio = 0
D) Retention ratio = 0
E) Sales Total assets

Question

Which one of these is a requirement if the sustainable growth rate is to exceed the internal growth rate?
A) Net working capital > $0
B) Total debt > $0
C) Dividend ratio = 0
D) Retention ratio = 0
E) Sales > Total assets

Quizplus · Accepted Answer

The sustainable growth rate exceeds the internal growth rate when a company uses external financing, which implies having some level of debt.

Which One of These Is a Requirement If the Sustainable