The ________ is the maximum a firm can grow with internally generated equity and new borrowing sufficient to maintain the current long-term-debt to equity ratio.
A)internal growth rate
B)sustainable growth rate
C)return on equity
D)return on assets

Question

Quizplus · Accepted Answer

The sustainable growth rate equation calculates the maximum rate at which a company can grow without increasing its leverage beyond a certain point. It considers a firm's internal growth rate and factors in the impact of debt on growth.

The ________ Is the Maximum a Firm Can Grow with Internally