Which of the Following Does Not Provide a "Solution" to a Projected

question 117

Multiple Choice

Which of the following does not provide a "solution" to a projected growth rate in assets that exceeds the sustainable growth rate?

• A) Increase the ROE.
• B) Allow the debt-equity ratio to increase.
• C) Increase the payout ratio.
• D) Issue new equity.

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Definitions:

Shares Outstanding

The aggregate amount of shares held by all stakeholders in a company, encompassing those retained by institutional investors and the restricted shares in possession of the company's executives and insiders.

Stock Price

This is the cost of a single share of a company’s stock, a direct reflection of what investors believe a company is worth.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares rather than cash, adjusting the ownership proportionately.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuing party, often used in the accounting of share capital.