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Which one of the following has the least effect on a firm's sustainable rate of growth?

A. Debt-equity ratio
B. Quick ratio
C. Capital intensity ratio
D. Dividend policy
E. Profit margin

User Bretik
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1 Answer

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Final answer:

The quick ratio has the least effect on a firm's sustainable rate of growth because it is a liquidity measure rather than a growth, profitability, or policy indicator.

Step-by-step explanation:

The question asks which factor has the least effect on a firm's sustainable rate of growth. When assessing the impact on the sustainable growth rate of a firm, factors such as the debt-equity ratio, capital intensity ratio, dividend policy, and profit margin are typically considered as they directly influence a company's financial leverage, reinvestment rate, operational efficiency, and profitability. However, the quick ratio, which is a measure of a company's ability to meet short-term obligations with its most liquid assets, has relatively little to do with growth potential, as it is a liquidity measure, not a performance or strategic metric like the other options.

User VJS
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