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The following information applies to XYZ Co.: ROE = 20% R = 0.8 Current sales = $700 What will happen if the company decides that

The following information applies to XYZ Co.: ROE = 20% R = 0.8 Current sales = $700 What will happen if the company decides that it wants to increase sales to $1,000?

a. The company can comfortably grow without any external financing.

b. The company will need to pay higher dividends.

c. The company will grow at less than its sustainable growth rate.

d. The company will grow at more than its internal growth rate.

e. The company will grow bankrupt.

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