All of the Following Statements Are Correct Except

question 64

Multiple Choice

All of the following statements are correct except:

• A) The internal growth rate measures how quickly a firm can increase its asset base over the next year without raising outside funds.
• B) The retention rate represents the proportion of every $1 of earnings per share that is retained by the firm; in other words, it is equal to one minus the dividend payout ratio.
• C) The sustainable growth rate measures how quickly the firm can grow when it uses only debt financing to keep its capital structure constant over time.
• D) The internal and sustainable growth rate relationships suggest that there are three measurable influences on growth: dividend policy (as reflected in the retention rate), profitability (as measured by ROA), and the firm's capital structure (as measured by the equity multiplier).

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Definitions:

Behaviorism

A theory in psychology that emphasizes the importance of observable actions and behaviors over internal processes.

Experimental Method

is a research methodology where the researcher manipulates one variable and controls/randomizes the rest of the variables to study cause-and-effect relationships.

Cognitive Psychologist

A professional who studies mental processes including how people think, perceive, remember, and learn, often focusing on areas such as problem-solving, decision-making, and memory.

Cognitive Processes

The mental activities involved in acquiring, storing, and manipulating knowledge, such as perception, memory, and thinking.