The sustainable growth rate is the rate of growth that the company can sustain without selling additional equity.

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The sustainable growth rate is the maximum rate at which a company can grow without having to raise additional equity. It takes into account the company's profitability, retention rate of earnings, and debt-to-equity ratio. If a company grows at a rate higher than its sustainable growth rate, it will have to raise additional equity to finance that growth.

The Sustainable Growth Rate Is the Rate of Growth That