Sustainable Growth Rate - SGR

What Does Sustainable Growth Rate - SGR Mean?
The maximum growth rate that a firm can sustain without having to increase financial leverage.

Calculated as:

ROE x (1 - dividend-payout ratio)

Investopedia explains 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.

Related Terms

Critical Mass
Dividend Payout Ratio
Leverage
ROE
More Related Terms

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