Question
Help me Please Eksternal Financial Need [EFN] and Growth Rate. Broslofski Co. maintains a positive retention ratio and keeps its debt equity ratio constant every
Help me Please
Eksternal Financial Need [EFN] and Growth Rate. Broslofski Co. maintains a positive retention ratio and keeps its debt equity ratio constant every year. When sales grow by 20 percent, the firm has a negative projected EFN. What does this tell you about the firms sustainable growth rate? Do you know, with certainty, if the internal growth rate is greater than or less than 20 percent? Why? What happens to the projected EFN if the retention ratio is increased? What if the retention ratio is decreased? What if the retention ratio is zero?
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