Which of the following is true of the sustainable growth rate concept?
A)It is an empirical measure of a firm's strength.
B)It assumes that the financial ratios change at a constant rate.
C)It assumes that the firm doesn't raise any new equity by selling stock.
D)It is the growth in assets created by additional external funding.

Question

Quizplus · Accepted Answer

The sustainable growth rate concept assumes that the firm doesn't raise any new equity by selling stock. The concept calculates the rate at which a company can grow without taking on additional external funding, which includes the issuance of new equity.

Which of the Following Is True of the Sustainable Growth