If a Firm with a Positive Net Worth Is Operating

question 31

True/False

If a firm with a positive net worth is operating its fixed assets at full capacity, if its dividend payout ratio is 100%, and if 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:

Future Outcome

An event or result that occurs later in time, often as a consequence of actions taken in the present.

Forecasts

Predictions about future events, conditions, or trends based on current data or analysis, used to assist in planning and decision-making.

Shortsighted Emphasis

A focus on immediate outcomes without considering long-term implications.

Organizational Strategy

A plan devised by an organization to achieve long-term goals and sustain competitive advantage.