Sales 10,000.00 CA 12,000.00 CL 2,400.00 Costs 8,000.00 Fixes Assets 13,

Sales	10,000.00	CA	12,000.00	CL	2,400.00
Costs	8,000.00	Fixes Assets	13,000.00	LTD	4,800.00
EBT	2,000.00			Equity	17,800.00
Tax@21%	420.00	Total	25,000.00		25,000.00
NI	1,580.00

All the assets, costs, and CL are proportional to sales and the sales are projected to increase by 12 percent. Long-term debt and equity are not proportional to sales but the firm expects to borrow a net $1,000 as long-term debt and reduce its equity by $500 during the year. The company follows a policy of a constant 40 percent dividend payout ratio. What is the external financing need?

Expert Solution

ekkarill92 answered 2 years ago

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