If a Non-Dividend-Paying Firm Bases Its Growth Assumptions on the Sustainable

question 1

Multiple Choice

If a non-dividend-paying firm bases its growth assumptions on the sustainable rate of growth and shows positive net income,then the pro forma statement must reflect

• A)an increase in fixed assets irrespective of the firm's current operating capacity.
• B)an increase in both sales and the debt-equity ratio.
• C)both an increase in the total asset turnover and in the equity multiplier.
• D)a constant debt-equity ratio and an increase in retained earnings.
• E)increases in fixed assets,the debt-equity ratio,and the number of shares outstanding.

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A group creativity technique in which efforts are made to find a conclusion for a specific problem by gathering a list of ideas spontaneously contributed by its members.

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Anything that stifles creativity or prevents good ideas from being expressed or considered.

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A method of solving problems or identifying opportunities when conventional thinking has failed.