The rate at which a firm can grow without issuing any new shares of stock while keeping its dividend policy,financial policy,and profitability constant is the

Question

Quizplus · Accepted Answer

The sustainable growth rate is the rate at which a firm can realistically grow without having to issue new shares while keeping its current financial policies, dividend policies, and profitability unchanged. The optimal growth rate is the rate where a firm can maximize its value, but it may require new share issuances or changes to its financial policies. The marginal growth rate refers to the additional growth a firm can achieve by employing additional capital. The theoretical growth rate is not a commonly used financial term.

The Rate at Which a Firm Can Grow Without Issuing