The Maximum Growth Rate for a Firm Which Maintains a Constant

question 377

Multiple Choice

The maximum growth rate for a firm which maintains a constant debt-equity ratio and which avoids additional external equity financing is called the _____ growth rate.

• A) Internal.
• B) External.
• C) Sustainable.
• D) Supportable.
• E) Exponential.

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Definitions:

Period's Change

The difference in a specific financial indicator or performance measure from one established period to the next.

Liabilities

Obligations owed by a company to third parties, such as loans, accounts payable, or mortgages, expected to be paid or settled.

Owner's Equity

The residual interest in the assets of a business after deducting liabilities.

Total Liabilities

The aggregate of all debts and financial obligations owed by a company to external entities at any point in time.