Suppose a firm maintains a positive retention ratio and keeps its debt-equity ratio constant every...
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Suppose a firm maintains a positive retention ratio and keeps its debt-equity ratio constant every year. When sales grow by 20%, the firm has a negative projected EFN. a) Can you tell, with certainty, that the sustainable growth rate is greater than/equal to/ less than 20%? Why/Why not? b) Do you know with certainty that the internal growth rate is greater than/equal to/ less than 20%? Why/Why not?
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