A Firm's Sustainable Growth Rate Represents The

question 68

Multiple Choice

A firm's sustainable growth rate represents the:

• A)Highest growth rate without decreasing the dividend
• B)Highest growth rate without increasing financial leverage
• C)Percentage change in sales times the profit margin
• D)Possible growth without jeopardizing net working capital Internal growth rate = plowback ratio x ROE x (equity/assets)
• )06 = .41 x (.11 x asset turnover x 2) x .5
• )06 = .2 x (.2 asset turnover)
• )06/.04 = .04 asset turnover/.04

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Definitions:

Concrete Operational

A stage in Jean Piaget's theory of cognitive development during which children (ages 7-12 approximately) gain a better understanding of mental operations, leading to more logical thoughts about concrete events.

Formal Operational

The stage of cognitive development, according to Piaget, where individuals can think abstractly and systematically.

Assimilation

The cognitive process of fitting new information into pre-existing cognitive schemas, perceptions, and understanding.

Accommodation

The process of adapting or adjusting one's cognitive structures to incorporate new information from the environment.