A Firm's Internal Growth Rate Is All of the Following

question 1

Multiple Choice

A firm's internal growth rate is all of the following except:

• A) the rate below which external financing is needed.
• B) the ratio of reinvested earnings to assets.
• C) the maximum growth rate without requiring external sources of new capital.
• D) the product of the plowback ratio, ROE, and the ratio of equity to assets.

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Definitions:

Sellers

Individuals or entities that offer goods or services for sale to potential buyers.

Price Ceiling

A government-imposed maximum price that can be charged for a good or service, intentionally set below the market equilibrium to protect consumers.

Shortage

A situation in which the demand for a good or service exceeds its supply in a market.

Price Floor

A minimum price set by the government or a regulatory body, below which a particular good or service cannot legally be sold.