Which One of the Following Statements Is NOT True

question 23

Multiple Choice

Which one of the following statements is NOT true?

• A) The internal growth rate (IGR) is defined as the maximum growth rate that a firm can achieve without external financing.
• B) The higher the retained earnings generated by a firm, the higher the growth possible without using external funding.
• C) Given the same level of retained earnings, a firm that has the higher amount of total assets, the higher the growth possible without using external funding.
• D) All of the above are true.

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Definitions:

Negotiability

The attribute of a financial instrument allowing it to be transferred or assigned from one party to another.

Requirements of Negotiability

Legal criteria that an instrument must meet to be considered negotiable, allowing it to be transferred from one party to another.

Certificate of Deposit

A savings certificate with a fixed maturity date and specified fixed interest rate that is issued by a bank and is insured by the Federal Deposit Insurance Corporation (FDIC).

Promissory Note

A written promise to pay a specified amount of money to a designated person or entity by a certain date or on demand.