Question Text

How does a company assess its sustainable growth rate (SGR)?

       How does a firm use the SGR in decision making?

       What are the consequences for a firm that grows a higher rate than its SGR?

       What are the consequences for a firm that grows at a lower rate than its SGR?

Consider the following ideas to include in your answer:

       Which variables are used in calculating the SGR?

       How does a firm use the SGR in choosing a financing option?

       How does a firm finance a growth that is higher than its SGR?

       What is the opportunity cost for a firm that grows at a lower rate than its SGR?