A firm expects growth next year to be 12%.Its sustainable growth rate is 10%.Which of the following is TRUE?
A) The firm will need to raise additional debt such that its debt-to-equity ratio will increase.
B) The firm may be able to keep its debt-to-equity ratio the same by reducing dividends (assuming they are projected to be high enough) .
C) The firm will need to raise additional capital through a stock issue.
D) The firm will have excess cash to increase dividends,pay back debt,or repurchase equity.
E) The firm will not be able to maintain its debt-to-equity ratio.
Correct Answer:
Verified
Q47: What are a firm's options when it
Q56: What is the major shortcoming of the
Q58: Use the table for the question(s)below.
Q59: The market size for Loppins is 80
Q60: Use the table for the question(s)below.
Ideko Sales
Q62: A firm has $70 million in equity
Q64: A firm has $80 million in equity
Q65: A firm has $50 million in equity
Q66: A firm has ROA of 12%,ROE of
Q70: For valuing a planned expansion, in addition
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents