If a Firm Wants to Maintain Its Ratios at Their

question 7

True/False

If a firm wants to maintain its ratios at their existing levels, then if it has a positive sales growth rate of any amount, it will require some amount of external funding.

---

Definitions:

Common Stock

A type of security that signifies a share of ownership in a corporation, known as corporate equity ownership.

Issue Price

The price at which a new security is offered to the public for sale when it is issued.

Par of Common Stock

The stated face value of a common stock as specified in the corporate charter, which has little relation to the stock’s market value.

Par Value

Par value is the nominal or face value of a stock or bond as stated by the issuing company, which might not reflect its market value.