Sustainable Growth Rate, sometimes the acronym g is used. It is a term that refers to the enterprise growth rate in which it is no need to provide additional external resources for financing, since it is financed wholly from its own resources and reinvested earnings.
Calculation:
g = ROE × Plowback Ratio
Use of the g in practice: It is used, for example, in Gordon model for the calculation of the intrinsic share value, because it is the growth rate at which the funding structure does not change.
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