If a Firm Wants to Maintain Its Present Ratio of Debt

question 240

Multiple Choice

If a firm wants to maintain its present ratio of debt to equity, its present dividend payout ratio, and does not want to sell any new equity, the firm's growth rate in sales and assets must be less than or equal to its:

• A) Dividend payout ratio.
• B) Retention ratio.
• C) Sustainable growth rate.
• D) Growth rate with no external financing.
• E) Projected sales growth rate.

---

Definitions:

Advancement

The process of moving forward in one's career, which may involve a higher position, increased responsibilities, or better salary.

Job Satisfaction

The level of contentment or happiness an individual feels regarding their job, influenced by factors like work environment, responsibilities, and compensation.

Company Policy

Formal guidelines and rules established by a business to dictate decisions and achieve rational outcomes.

Opportunity For Growth

The potential for personal, professional, or business expansion and development, often leading to increased skills, knowledge, or profits.