In Problem 24, suppose the firm wishes to keep its debt-equity ratio constant. What is EFN now?

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In Problem 24, suppose the firm wishes to keep its debt-equity ratio constant. What is EFN now?

Data From Problem 24:

The most recent financial statements for Fleury, Inc., follow. Sales for 2015 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Cost other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 20 percent growth rate in sales?

Sales Costs Other expenses FLEURY, INC. 2014 Income Statement Earnings before interest and taxes Interest

Current assets Cash Assets Accounts receivable Inventory Total Total assets FLEURY, INC. Balance Sheet as of

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Fundamentals of Corporate Finance

ISBN: 978-0077861704

11th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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