The internal growth rate is best described as the __________ growth rate achievable:
A)minimum;if the firm does not pay out any dividends
B)minimum;if the firm maintains a constant equity multiplier
C)maximum;without external financing of any kind
D)maximum;without using any external equity financing,while maintaining a constant debt-equity ratio
E)maximum;without any limits on the amount of debt financing used by the firm

Question

Quizplus · Accepted Answer

The internal growth rate is the maximum growth rate that a company can achieve without any external financing, meaning that it can only rely on internal resources such as retained earnings to finance its growth. Therefore, the correct answer is C, as it explicitly states that the growth rate achievable is the maximum without external financing of any kind.

The Internal Growth Rate Is Best Described as the __________