The Sustainable Growth Rate Is Based on the Premise That

question 27

Multiple Choice

The sustainable growth rate is based on the premise that:

• A)an additional dollar of debt will be acquired only if an additional dollar in equity shares is issued.
• B)no additional equity will be added to the firm.
• C)the debt-equity ratio will be held constant.
• D)the dividend payout ratio will be zero.
• E)the dividend payout ratio will increase at a steady rate.

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Definitions:

Balance of Probabilities

The standard of evidence in civil trials, where a case is decided in favor of the party whose claim is more likely to be true.

Writ

A formal legal document issued by a court or judicial officer commanding the performance of a specific act.

Chambers Application

A legal request or motion made to a judge in their chambers, often dealing with interim or procedural matters.

Trial

A formal examination and determination of legal or factual issues by a judicial body, often including a jury, resulting in a judgment or verdict.