A Contract Consists of Mutual Promises Between Two Parties That

question 43

True/False

A contract consists of mutual promises between two parties that can be enforced in a court of law.

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Definitions:

Internal Growth Rate

The maximum growth rate a firm can achieve without resorting to external financing.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without increasing its financial leverage.

Debt to Equity Ratio

The ratio showing the variance in financing methods between debt and equity for a company’s assets.

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders as dividends, expressed as a percentage of the company's total earnings.