Which one of these statements correctly interprets a sustainable growth rate of 4 percent?
A. A firm can grow by 4 percent annually without issuing any new debt or new equity.
B. A firm can grow by 4 percent without any additional financing of any kind.
C. A firm can grow by 4 percent annually without increasing its probability of incurring financial distress.
D. A firm can grow by 4 percent annually without increasing its probability of incurring financial distress.
Ans: D. A firm can grow by 4 percent annually without increasing its probability of incurring financial distress.
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