Question: Using the same information from the previous problem, (Stephens, Inc. (SI) reported net income of $120,000 for the fiscal year that just ended and expects

 Using the same information from the previous problem, (Stephens, Inc. (SI)

Using the same information from the previous problem, (Stephens, Inc. (SI) reported net income of $120,000 for the fiscal year that just ended and expects net income to grow at 5% per year indefinitely. SI also reported current assets of $700,000, net fixed assets of $220,000 and total assets of $920,00 for most recent fiscal year. Sl's current liabilities of $100,000 and long-term debt of $540,000.) Assume that retained earnings is the only other equity account and that current assets and current liabilities vary with sales, but the other accounts do not. Additionally, assume that SI pays out 80% of net il come as dividends. What is the additional external financing needed forecast for next year? Select one: O a. -$10,800 b. $4,800 c. $10,800 bd $12.828

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!