This is the maximum growth rate that can be achieved by financing asset growth with new debt and retained earnings.
A) internal growth rate
B) retained earnings growth rate
C) sustainable growth rate
D) weighted growth rate

Question

Quizplus · Accepted Answer

The sustainable growth rate is the maximum growth rate that a company can achieve by using internal resources such as new debt and retained earnings. It takes into account the company's profitability, retention rate, and asset turnover ratio to determine the rate at which the company can grow without external financing. Therefore, option C is the correct answer. Option A (internal growth rate) refers to the maximum growth rate a company can achieve by using only retained earnings, while option B (retained earnings growth rate) is the rate at which a company retains its earnings. Option D (weighted growth rate) is not a commonly used term in finance and does not relate to the concept described in the question.

This Is the Maximum Growth Rate That Can Be Achieved