The most recent financial statements for Schism, Inc., are shown here: Assets and costs are proportional to

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The most recent financial statements for Schism, Inc., are shown here:

Income Statement Sales Costs Taxable income Taxes (34%) Net income $19,200 15,550 $ 3,650 1,241 $ 2,409

Assets and costs are proportional to sales. Debt and equity are not. Adividend of $1,445.40 was paid, and Schism wishes to maintain a constant payout ratio. Next year’s sales are projected to be $24,000. What is the external financing needed?

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Fundamentals Of Corporate Finance

ISBN: 9780072553079

6th Edition

Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

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Question Posted: Oct 03, 2023 08:59 AM

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The most recent financial statements for Schism, Inc., are shown here: Assets and costs are proportional to

Question:

Income Statement Sales Costs Taxable income Taxes (34%) Net income $19,200 15,550 $ 3,650 1,241 $ 2,409 Balance Sheet Assets $93,000 Total $93,000 Debt Equity Total $20,400 72,600 $93,000

Step by Step Answer:

To calculate the external financing needed for the next year youll need to consider how the companys assets costs and payout ratio change with the pro...View the full answer

Fundamentals Of Corporate Finance

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