Question $43$

What decision does the financial manager face if the projected sales growth rate exceeds the

sustainable growth rate $($SGR$)?$

The firm will reduce its growth rate to match the internal growth rate

The firm will pay down its liabilities to reduce financial leverage

The firm will issue debt only and avoid raising any new equity

The financial manager will need to decide whether to increase financial leverage by issuing all debt or

consider issuing some equity to balance the funding needs