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What is the 'Sustainable Growth Rate  SGR'
The sustainable growth rate (SGR) is the maximum growth rate that a firm can sustain without having to increase financial leverage.
Calculated as:
ROE x (1  dividendpayout 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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