Which Effort Will Help a Firm Boost Its Internal Growth

question 39

Multiple Choice

Which effort will help a firm boost its internal growth rate?

• A) Plowing back a high proportion of its earnings
• B) Achieving a high return on equity
• C) Maintaining a low debt-to-asset ratio
• D) All of these

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Definitions:

Legal Capital

The minimum amount of capital that a company is required to maintain to protect creditors, typically determined by law.

Shares Issued

Refers to the total number of shares that have been allocated and are held by shareholders, including both public investors and company insiders.

Paid-In Capital

The total amount of money that shareholders have invested in a company through the purchase of shares.

Legal Capital

The minimum amount of capital that a company must maintain as required by law, often set to protect creditors.