Primary Task Response: If a company grows too fast, it can find itself without access to the resources it needs to meet its obligations. If it grows too slowly, it may find itself missing strategic as well as tactical opportunities. Calculating and understanding a firm’s optimal or sustainable growth rate is critical to the goal of maximizing shareholders’ wealth and developing an optimal capital structure. You senior analyst has asked you to do some research in this area and to share what you have learned with the other junior analysts on staff through the company discussion board. She has asked you to research and address the following topics in your post of 400-600 words:
- What is sustainable growth, and why is it important to calculate and understand this rate?
- What is the sustainable growth equation, what are its components, and how is it calculated?
- If a company grows too fast, what funding alternatives are generally available?
- If a company grows too slow, what steps should it take to maintain its stock price?
Be sure to document your statements with credible sources, in-text citations, and references using proper APA format.
Responses to Other Students: Respond to at least 2 of your fellow classmates with a reply of 100–200 words about their Primary Task Response regarding items you found to be compelling and enlightening. To help you with your discussion, please consider the following questions:
- What did you learn from your classmate’s posting?
- What additional questions do you have after reading the posting?
- What clarification do you need regarding the posting?
- What differences or similarities do you see between your posting and other classmates’ postings?
For assistance with your assignment, please use your text, Web resources, and all course materials.