Assume a firm has an equity multiplier of 1.2. Given this, what is the relationship between the internal growth rate and the sustainable growth rate?
A. There is on relationship between ROE, ROA, and the rates of growth.
B. Internal growth rate > Sustainable growth rate
C. Sustainable growth rate > Internal growth rate
D. Sustainable growth rate = Internal growth rate
Ans: C. Sustainable growth rate > Internal growth rate
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