XYZ Ltd., a medium-sized company in the renewable energy sector, is experiencing steady sales growth. The company's management, however, is…

XYZ Ltd., a medium-sized company in the renewable energy sector, is experiencing steady sales growth. The company's management, however, is concerned about balancing rapid growth with long-term sustainability. In the past year, XYZ's growth objectives have led to aggressive expansion plans, but management now realizes that such growth might not be financially sustainable in the long run. This raises concerns about how to maintain the company's financial health while meeting its ambitious growth targets. The CFO of XYZ Ltd. highlights the importance of Sustainable Growth Rate (SGR). The company now needs to ensure that its operational and financial policies align with its growth goals. XYZ must avoid expanding too quickly, which could strain its financial resources and lead to excessive borrowing. Moreover, management must also consider the long-term implications of resource consumption, particularly in the renewable energy industry, where sustainability is key to both current and future stakeholders. XYZ Ltd. also realizes that it needs to focus on building its growth capability alongside its growth strategy. Without the necessary infrastructure and financial planning in place, the company's efforts to achieve long-term, sustainable growth could be in jeopardy. Furthermore, the company is aware of the risks of relying too much on external financing and recognizes the need for a balance between maintaining sufficient equity and minimizing debt. Given the importance of these considerations, XYZ's management team must now review their growth strategy and financial policies to ensure they are consistent with the firm's sustainable growth objectives. From the information given above, choose the correct answer to the following questions: