Question: 3. More on the AFN (Additional Funds Needed) equation Green Moose Industries reported sales of $720,000 at the end of last year, but this year,
3. More on the AFN (Additional Funds Needed) equation Green Moose Industries reported sales of $720,000 at the end of last year, but this year, sales are expected to grow by 7%, Green Moose expects to maintain ets current profit margin of 20%6 and dividend payout ratio of 30%. The following information was taken from Green Moose's balance sheet: Based on the AFN equation, the firm's AFN for the current year is A positively signed AFN value represents: a point at which the funds generated within the firm equal the dernands for funds to finance the firm's future expected sales requirements. a shortage of internally generated funds that must be rased outside the company to finance the company's forecasted future growth. a sumplis of intemaly generated funds that can be invested in physical or financial assets or paid out as additional dividends. Because of its excess funds, Green Moose Industries is thinking about ratsing its dividend payput ratio to satisty shareholders, Green Moose could pay out of its eamings to shareholders without needing to raise amy external capital. (Hint: What can Green Moose increase its dividend payout ratio to before the AFN becomes positive?)
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