The Sustainable Growth Rate Is Defined as the Maximum Rate

question 107

Multiple Choice

The sustainable growth rate is defined as the maximum rate at which a firm can grow given which of the following conditions?

• A)No new external financing of any kind
• B)No new debt but additional external equity equal to the increase in retained earnings
• C)New debt and external equity in equal proportions
• D)New debt and external equity, provided the debt-equity ratio remains constant
• E)No new equity and a constant debt-equity ratio

---

Definitions:

Organizational Outcomes

The results or consequences of an organization's actions, including its performance, employee satisfaction, and financial health.

Immediacy

Refers to the degree of directness and closeness in communication or interaction, often used to create a sense of urgency or intimacy.

Reciprocity

A social norm of responding to a positive action with another positive action, rewarding kind actions.

Romance Of Leadership

Involves people attributing romantic, almost magical, qualities to leadership.