For the next fiscal year, you forecast net income of $48,100 and ending assets of $507,000....

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For the next fiscal year, you forecast net income of $48,100 and ending assets of $507,000. Your firm's payout ratio is 10.6%. Your beginning stockholders' equity is $295,200, and your beginning total liabilities are $120,200. Your non-debt liabilities such as accounts payable are forecasted to increase by $10,300. Assume your beginning debt is $100,200. What amount of equity and what amount of debt would you need to issue to cover the net new financing in order to keep your debt-equity ratio constant? For the next fiscal year, you forecast net income of $48,100 and ending assets of $507,000. Your firm's payout ratio is 10.6%. Your beginning stockholders' equity is $295,200, and your beginning total liabilities are $120,200. Your non-debt liabilities such as accounts payable are forecasted to increase by $10,300. Assume your beginning debt is $100,200. What amount of equity and what amount of debt would you need to issue to cover the net new financing in order to keep your debt-equity ratio constant?

Answer rating: 100% (QA)

To keep the debtequity ratio constant we need to determine the amount of equity and debt that needs ... View the full answer