Question: FIN 3 7 0 - 3 0 0 8 / New stock has a higher cost than retained earnings, so XYZ Inc. would like to

FIN

370 - 3008 /

New stock has a higher cost than retained earnings, so XYZ Inc. would like to avoid issuing new stock. Which of the following actions would REDUCE its need to issue new common stock?

Reduce the amount of short

-

term bank debt in order to increase the current ratio.

Increase the dividend payout ratio for the upcoming year.

Reduce the percentage of debt in the target capital structure.

Decrease the proposed capital budget.

FIN 3 7 0 - 3 0 0 8 / New stock has a higher cost

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