Other Things Equal,a Firm's Sustainable Growth Rate Could Increase as a Result

question 32

Multiple Choice

Other things equal,a firm's sustainable growth rate could increase as a result of:

• A) increasing the plowback ratio.
• B) increasing the payout ratio.
• C) decreasing the return on equity.
• D) increasing total assets.

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Definitions:

Corporation's Bonds

Debt securities issued by corporations to raise capital, with the promise to pay back the principal amount along with interest at specified dates.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage.

Premium

The excess of the issue price of bonds over their face amount; the excess of the issue price of stock over its par value.

Bonds Payable

A liability account that records the amount owed by an entity to holders of its bonds, to be repaid at a specified future date.