Which of the following can affect a firm's sustainable rate of growth?
I.Asset turnover ratio
II.Profit margin
III.Dividend policy
IV.Financial leverage
A) III only
B) I and III only
C) II,III,and IV only
D) I,II,and IV only
E) I,II,III,and IV

Question

Quizplus · Accepted Answer

All four factors can affect a firm's sustainable rate of growth. Asset turnover ratio and profit margin impact how efficiently a firm uses its assets and how much profit it makes, respectively, influencing its ability to reinvest and grow. Dividend policy affects how much of its earnings are retained versus distributed to shareholders, impacting available funds for growth. Financial leverage influences the cost of capital and risk, affecting growth capacity.

Which of the Following Can Affect a Firm's Sustainable Rate