Reinvestment flows under leverage and endogenous growth

A firm growing endogenously and wishing to keep a constant leverage ratio will be able to invest not only the retained earnings but also the amount of new issued debt. Therefore, when leverage is accounted for, reinvestment flows differ from retained equity holder earnings. The link between leverage, dividend payout, reinvested flows and the growth rate are explored, and it is verified that reinvested flows are bounded and that they rise when dividend payouts fall, in such a way that the higher the leverage the higher the invested flows for each level of dividend payout.