A firm can achieve a higher growth rate (within limits) without raising external capital by
a increasing the proportion of debt in its capital structure.
b increasing its current ratio.
c decreasing its days in inventory period.
d decreasing its plowback ratio.

Respuesta :

The correct answer to the given question of higher growth rate is option c) decreasing its days in inventory period.

External financing, as used in the theory of capital structure, refers to money that businesses borrow from sources other than themselves. Contrast this with internal financing, which mostly comprises of profits held back by the company for investment. External finance comes in a variety of forms. Trade credit, accounts payable, and taxes owing to the government are all examples of external funding in addition to the two primary types, equity offerings (IPOs or SEOs). Due to the fact that obtaining external finance frequently involves a transaction cost for the company, it is generally believed to be more expensive than obtaining internal funding.

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