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Question 15.19: What is the ICGR, and why is it important to the management ...

What is the ICGR, and why is it important to the management of a financial firm?

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The ICGR indicates how fast a firm can allow its assets to grow and still keep its capital-to-asset ratio fixed. The ICGR indicates how fast earnings must grow and what proportion must be retained in the business to insure a constant capital-to-asset ratio.

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The relevant formula is:   \text { ICG...