If a fiRm Wants to Maintain Its Present Ratio of Debt

question 141

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.

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Definitions:

Valence Shell

The outermost shell of electrons in an atom, important in determining an element's chemical properties.

Chemically Bonded

A method of joining materials using a process involving chemical reactions to create a strong bond between surfaces.

Molecule

The smallest unit of a chemical substance that still retains its chemical properties, typically made up of two or more atoms bonded together.

Outer Shell Electrons

Electrons located in the outermost shell of an atom, playing a crucial role in chemical reactions and bonding.