Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales.
Question:
Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales.
INCOME STATEMENT, 2017
Sales ...................................... $950
Costs ........................................ 250
Interest ...................................... 50
Taxes ....................................... 150
Net income .............................. $500
.png)
a. Find Eagle's required external funds if it maintains a dividend payout ratio of 70% and plans a growth rate of 15% in 2018.
b. If Eagle chooses not to issue new shares of stock, what variable must be the balancing item?
c. What will be the value of this balancing item?
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
All input values are shown in yellow Only these values need c...View the full answer
Fundamentals of Corporate Finance
ISBN: 978-1259722615
9th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
