Which of the following actions would help a firm's growth problem if its actual sales growth exceeds its sustainable rate of growth?
I.Increase prices
II.Decrease financial leverage
III.Decrease dividends
IV.Prune away less-profitable products
A) I and II only
B) I and III only
C) I,II,and IV only
D) I,III,and IV only
E) I,II,III,and IV

Question

Quizplus · Accepted Answer

I: Increasing prices will slow down sales growth and therefore help the firm reach a sustainable rate of growth.
III: Decreasing dividends will allow the firm to retain more earnings and use them for growth opportunities. 
IV: Pruning away less-profitable products can help the firm focus on its core products and improve profitability, which can increase sustainable growth. 
II is not necessarily related to growth but decreasing financial leverage can improve a firm's financial health and reduce risks.

Which of the Following Actions Would Help a Firm's Growth