Griz Gear Inc. has $50,000 in debt and $80,000 in equity and does not want the debt to equity ratio to increase, nor can it issue new stock at this time. The firm has net income of $13,000, employs a constant 40% dividend payout ratio and the firm’s SGR is 10.80%. If sales do grow at 10.80% calculate how much new debt can the firm use to finance its growth without issuing new equity or forcing the debt to equity ratio to rise (rounded to the nearest dollar)?

Answer rating: 100% (QA)

Step 12 The right response is around 6667 DebtEquity may be used to compute the debttoequity ratio T... View the full answer