Which of the following is the maximum growth rate that can be achieved by financing asset growth with new debt and retained earnings?
A)Internal growth rate
B)Retained earnings growth rate
C)Sustainable growth rate
D)Weighted growth rate

Question

Quizplus · Accepted Answer

The maximum growth rate that can be achieved by financing asset growth with new debt and retained earnings is called the sustainable growth rate. This rate takes into account both internal sources of financing, such as retained earnings, and external sources, such as new debt. The sustainable growth rate is calculated as (ROE x (1 - Dividend payout ratio)).

Which of the Following Is the Maximum Growth Rate That