Answer: dividend payout ratio.

## Explanation The sustainable growth rate (SGR) formula is: \[ \text{SGR} = \text{ROE} \times (1 - \text{Dividend Payout Ratio}) \] Where: - ROE = Return on Equity - Dividend Payout Ratio = Dividends / Net Income **Analysis of each option:** - **A: Asset turnover** - A decrease in asset turnover would decrease ROE (since ROE = Profit Margin × Asset Turnover × Equity Multiplier), which would decrease SGR - **B: Financial leverage** - A decrease in financial leverage (equity multiplier) would decrease ROE, which would decrease SGR - **C: Dividend payout ratio** - A decrease in dividend payout ratio increases the retention ratio (1 - Dividend Payout Ratio), which directly increases SGR Therefore, only a decrease in dividend payout ratio will increase the sustainable growth rate. The correct answer is **C**.

Author: LeetQuiz Editorial Team