Upgrade subject to access all content
Which of the following statements is/are true about the sustainable growth rate? Select ALL that apply.
The sustainable growth rate demands exclusive external equity financing to calculate.
The sustainable growth rate is the maximum growth rate an organization can achieve without external equity financing while maintaining a constant debt-equity ratio.
The sustainable growth rate is the maximum growth rate a firm can maintain without increasing its financial leverage.
When determining sustainable growth, the organization must determine the appropriate debt to equity ratio that is optimal for their purposes.