Which of the Following Statements About the Sustainable Growth Rate

question 61

Multiple Choice

Which of the following statements about the sustainable growth rate (SGR) is NOT true?

• A) The SGR is a function of the plowback ratio and the ROE.
• B) The SGR determines the rate of growth that a firm can sustain without selling additional shares of equity.
• C) The SGR helps management to determine whether they can avoid issuing new debt.
• D) All of these

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Definitions:

Stimulus Generalization

This refers to the psychological phenomenon where a response that has been learned to one stimulus is evoked by other, similar stimuli.

Operant Conditioning

A training mechanism in which the degree of a behavior is controlled by the application of rewards or punishments.

Animal

A living organism that feeds on organic matter, typically having specialized sense organs and nervous system and able to respond rapidly to stimuli.

Punishment

A consequence that reduces the probability of a behavior being repeated, often by introducing a negative outcome or removing a positive stimulus.