Which one of the following changes will decrease a firm's internal growth rate?

Question

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The internal growth rate is the maximum growth rate a company can achieve using only internal financing, without the need for external funding. The formula for the internal growth rate is (ROA x plowback ratio) / (1- ROA x plowback ratio), where ROA is the return on assets. Therefore, a decrease in the plowback ratio (C) will decrease the internal growth rate, as there will be less retained earnings available for reinvestment in the business. On the other hand, an increase in net income with a given dividend payout ratio (B) will increase the internal growth rate, as there will be more earnings available for reinvestment. A decrease in dividends with a given net income (A) will also increase the internal growth rate, as more earnings will be retained for reinvestment. A decrease in assets with a set dividend payout ratio (D) will have no effect on the internal growth rate, as it only affects the dividend payout ratio, not the plowback ratio.

Which One of the Following Changes Will Decrease a Firm's