A company with a target D/E ratio of 1.6 reported earnings of $760,000 for the period just ended. If $608,000 was the addition to retained earnings and the company uses a residual dividend policy, what will be the increase in borrowing to maintain its target D/E ratio?

Answer rating: 100% (QA)

To calculate the increase in borrowing to maintain the target debttoequity DE ratio we need to first ... View the full answer