Suppose a Firm with a Positive Net Worth Is Operating

question 8

True/False

Suppose a firm with a positive net worth is operating its fixed assets at full capacity, its dividend payout ratio is 100%, and it wants to hold all financial ratios constant. Then, for any positive growth rate in sales, it will require external financing.

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Definitions:

Distress

A negative emotional state that arises from situations perceived as overwhelming or beyond one's ability to cope.

Dysfunction

Impaired or abnormal functioning of a system, organ, or part of the body, often hindering the individual’s daily life and activities.

Danger

The possibility of suffering harm or injury.

Deinstitutionalization

The method of substituting extensive duration psychiatric facilities with more integrated mental health services in the community for individuals identified with a mental illness.