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In: Finance

For the next fiscal​ year, you forecast net income of and ending assets of $ 49,700...

For the next fiscal​ year, you forecast net income of and ending assets of $ 49,700 and ending assets of $ 506,500. Your​ firm's payout ratio is 10.1%.

Your beginning​ stockholders' equity is $ 295,700 and your beginning total liabilities are $ 119,500.

Your​ non-debt liabilities such as accounts payable are forecasted to increase by $ 9,900.

Assume your beginning debt is $ 109,300.

What amount of equity and what amount of debt would you need to issue to cover the net new financing in order to keep your​ debt-equity ratio​ constant?

The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditure).

The amount of equity to issue and the amount of debt to issue ___________

Please explain in details your step by step neatly. I can't seem to figure out the new debt and the formulas

Thank you!!

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Expert Solution

jeff jeffy answered 1 year ago
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