Question

The sustainable growth rate: Multiple Choice assumes the debt-equity ratio is variable. is normally higher than the internal growth rate. assumes the dividend payout ratio is equal to zero. assumes there is no external financing of any kind. is based on receiving additional external equity financing.

Answer 1

assumes there is no external financing of any kind.

Step-by-step explanation:

Sustainable growth rate is an economic term that is used to describe the maximum rate of development in which a firm or corporation can provide for without necessarily needing to seek for external source of finance such as more equity or debt for the growth.

Hence, in this situation, the correct answer is that the sustainable growth rate assumes there is no external financing of any kind.