The sustainable growth rate concept can be used to show that growth depends on four fundamentals. Which of the following is an incorrect statement of one of those fundamentals?
A) Leverage or the use of borrowed money is measured by the equity multiplier.
B) Earnings retention is measured as 1 minus the dividend payout ratio.
C) The firm's talent in asset management is typically measured by ratios like the ACP.
D) Profitability is measured by ROS, the firm's return on sales.
Correct Answer:
Verified
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