Sustainable Growth Rate - SGR


DEFINITION of 'Sustainable Growth Rate - SGR'

The maximum growth rate that a firm can sustain without having to increase financial leverage.

Calculated as:

ROE x (1 - dividend-payout ratio)


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BREAKING DOWN 'Sustainable Growth Rate - SGR'

The sustainable growth rate is a measure of how much a firm can grow without borrowing more money. After the firm has passed this rate, it must borrow funds from another source to facilitate growth.

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  1. How does equity financing affect a company's financials compared with the effects ...

    The sustainable growth rate, or SGR, for a company fluctuates depending on profitability and the dividend payout ratio, which ... Read Full Answer >>
  2. How can I find out the Medicare sustainable growth rate?

    Per the Social Security Act, the Medicare Payment Advisory Commission is required to make an estimate of the sustainable ... Read Full Answer >>
  3. In the context of a startup, what is sustainable growth?

    Sustainable growth is the maximum growth rate a startup can maintain internally without the need to seek external financing, ... Read Full Answer >>
  4. What incentives are there for a given country to enforce sustainable growth rate ...

    There are strong incentives for a country to expressly support sustainable growth rate (SGR) policies for domestic industry. ... Read Full Answer >>
  5. What is the history of the sustainable growth rate?

    The sustainable growth rate (SGR) can refer to different things. The two most common references are to the Medicare SGR or ... Read Full Answer >>
  6. How attractive is the food and beverage sector for a growth investor?

    The food and beverage sector is attractive for a growth investor. The sector's high degree of volatility means it tends to ... Read Full Answer >>

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