The most recent financial statements for Beckett Co. are shown here: INCOME STATEMENT BALANCE SHEET Sales...
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The most recent financial statements for Beckett Co. are shown here: INCOME STATEMENT BALANCE SHEET Sales $ 76,100 Costs 60,200 Taxable income $ 15,900 Taxes (23%) 3,657 Net income $ 12,243 Current assets Fixed assets 149,000 Total Maximum increase in sales $ 21,500 Long-term debt Equity $170,500 Total $ 55,000 115,500 $170,500 Assets and costs are proportional to sales. The company maintains a constant 35 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) The most recent financial statements for Beckett Co. are shown here: INCOME STATEMENT BALANCE SHEET Sales $ 76,100 Costs 60,200 Taxable income $ 15,900 Taxes (23%) 3,657 Net income $ 12,243 Current assets Fixed assets 149,000 Total Maximum increase in sales $ 21,500 Long-term debt Equity $170,500 Total $ 55,000 115,500 $170,500 Assets and costs are proportional to sales. The company maintains a constant 35 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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To calculate the maximum increase in sales that can be sustained without issuing new equity we need to analyze the given financial statements and the ... View the full answer
Related Book For
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Posted Date:
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