The maximum growth rate that can be achieved by financing asset growth with new debt and retained earnings is called the
A) internal growth rate.
B) retention rate.
C) sustainable growth rate.
D) operating expansion rate.

Question

Quizplus · Accepted Answer

The sustainable growth rate is the maximum rate at which a company can grow its sales, earnings, and dividends by using internally generated equity (retained earnings) and without issuing new debt or equity.

The Maximum Growth Rate That Can Be Achieved by Financing