Which effort will help a firm boost its internal growth rate?

Question

Quizplus · Accepted Answer

Achieving a high return on equity (ROE) can help a firm boost its internal growth rate. A high ROE means the firm is generating more profits with the same amount of equity, which can be reinvested into the company to fuel growth. Plowing back a low proportion of earnings (A) can also help boost internal growth, but it is less effective if the return on equity is low. Decreasing reinvested earnings (C) and maintaining a low sales-to-total assets ratio (D) are unlikely to help boost internal growth.

Which Effort Will Help a Firm Boost Its Internal Growth