Because Some Resources Are Valuable and Not Perfectly Uniform (They

question 30

True/False

Because some resources are valuable and not perfectly uniform (they are unique, not homogenous), acquiring or developing these can take years before a firm achieves and sustains higher profitability.

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Definitions:

Sustainable Growth Rate

The rate at which a company can grow its sales, earnings, and dividends without borrowing new funds.

Debt-equity Ratio

A gauge of a company's use of borrowing relative to the equity provided by its shareholders, determined by dividing liabilities by shareholders' equity.

Plowback Ratio

The proportion of earnings that a company reinvests in its business rather than distributing to shareholders.