A startup, Nutria Nutraceuticals (NN), has current liabilities of $4000, long-term debt of $2000, and total shareholder's equity including retained earnings of $3000. The coupon rate and YTM on the firm's debt is 5%. The firm has 100 shares outstanding and pays a dividend of $8 per share. The firm has sales of $10000, and COGS and SGA are 40% and 30% of sales, respectively. Depreciation is $400. The firm's tax rate is 20%. NN will actually grow by 50% over the next year. NN will not issue any new debt. Other income statement items will grow at the growth rate, as will total assets and current liabilities. How much new equity in dollars will NN need to issue?

Answer rating: 100% (QA)

Current liabilities 4000 Longterm debt 2000 Shareholders equity 3000 Dividend per share 8 Shares out... View the full answer