11. he need for external financing:

Multiple Choice

• will limit growth if unfunded.

• is unaffected by the dividend payout ratio.

• must be funded by long-term debt.

• ignores any changes in retained earnings.

• considers only the required increase in fixed assets.

12. The maximum rate of growth a corporation can achieve can be increased by:

Multiple Choice

• avoiding new external equity financing.

• increasing the corporate tax rate.

• increasing the retention ratio.

• increasing the dividend payout ratio.

• increasing the sales forecast.

13. The internal growth rate of a firm is best described as the ______ growth rate achievable ______.

Multiple Choice

• minimum; assuming a retention ratio of 100 percent

• minimum; if the firm maintains a constant equity multiplier

• maximum; excluding external financing of any kind

• maximum; excluding any external equity financing, while maintaining a constant debt-equity ratio

• maximum; with unlimited debt financing

14. The sustainable growth rate of a firm is best described as the ______ growth rate achievable ______.

Multiple Choice

• minimum; assuming a 100 percent retention ratio

• minimum; if the firm maintains a constant equity multiplier

• maximum; excluding external financing of any kind

• maximum; excluding any external equity financing, while maintaining a constant debt-equity ratio

• maximum; with unlimited debt financing