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Sustainable Growth Rate
The maximum rate at which a company can grow its sales, earnings, and dividends without increasing its equity and while maintaining its existing debt-equity ratio.
Debt-Equity Ratio
A calculation to determine a business's leverage by dividing its liabilities by the equity of its stockholders.
External Equity Financing
This term refers to the process through which a company raises capital by selling its shares to external investors, outside the existing shareholders or company insiders.
Internal Growth Rate
The maximum growth rate a firm can achieve without external financing, based on reinvestment of its own earnings.
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