A Firm That Wants to Increase Its Sustainable Growth Rate

question 68

Multiple Choice

A firm that wants to increase its sustainable growth rate can do so by __________ the __________ ratio or by __________ the __________,or both.

• A) increasing; payout; increasing; ROE
• B) increasing; plowback; increasing; ROE
• C) decreasing; plowback; increasing; ROE
• D) decreasing; payout; decreasing; ROE

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Definitions:

Fiscal Policy

Involves government policies on taxation and spending that aim to influence a country's economic conditions, such as controlling inflation, unemployment, and promoting economic growth.

Transfer Payments

Payments made by the government to individuals through various social benefit programs, without the government receiving any goods or services in return.

Government Purchases

Expenditures by the government for goods and services that directly satisfy public consumption or are invested in public infrastructure.

Taxes

Taxes are compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.