Which One of the Following Statements Is Correct for a Firm

question 50

Multiple Choice

Which one of the following statements is correct for a firm that has a sustainable growth rate that exceeds its projected growth rate in assets?

• A) The projected growth in assets will be restricted.
• B) The debt-to-asset ratio may decline.
• C) The firm's ROE must increase.
• D)The debt-equity ratio will increase unless equity is issued.

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Definitions:

Reportable Segment

A component of a business that can be separately identified for reporting purposes, often because it engages in operations that generate revenues and expenses.

Auditor's Report

A formal opinion or disclaimer, issued by an auditor, regarding the financial statements of a company, indicating whether they present a fair and accurate view.

Introductory

Pertaining to the beginning or initial stage of something, usually providing a basic level of information or understanding.

Scope

The extent of the area or subject matter that something deals with or to which it is relevant.