The formula which indicates if a company embarking on a growth strategy will need to take on debt to fund this growth is called
A) the return on investment.
B) the CAPM.
C) the index of sustainable growth.
D) operating cash flow.
E) the Z-value.

Question

Quizplus · Accepted Answer

The index of sustainable growth (ISG) formula helps determine the rate at which a company can grow without having to resort to taking on debt. If the ISG is lower than the desired rate of growth, it indicates that the company will need to take on debt to fund the growth.

The Formula Which Indicates If a Company Embarking on a Growth