Question
For the Company VERIZON, predict the sustainable growth rate of the firm using two methods. First, use Return on Equity and the Retention Ratio to
For the Company VERIZON, predict the sustainable growth rate of the firm using two methods. First, use Return on Equity and the Retention Ratio to predict the growth rate. Second, using the Return on Assets Ratio and the Retention Ratio and Asset to Equity Ratio to predict growth. Compare this to the actual growth rate of the firm. Is the growth rate of the firm over, under, or at the sustainable level? If the growth rate is over or under the sustainable rate, explain why. If the growth rate for your firm is sustainable, then describe what action you would take if the growth rate would be either greater than what is sustainable OR less than what is sustainable. Explain why.
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