Hendrikson & Sons has a capital structure that consists of 60% equity and 40% debt. The company expects to report $4 million in net income this year, and 10% of net income will be paid out as dividends. If the company wants to maintain the current capital structure, how large can the firm's total capital budget be for this years planning without it having to issue any new common stock.

Answer rating: 100% (QA)

To determine the maximum capital budget that Hendrikson Sons can have without issuing new common sto... View the full answer