Northern California Heating and Cooling Inc. has a six month backlog of orders for its patented solar heating system. To meet this demand, management plans to expand production capacity by 35% with a $10 million investment in plant and machinery. The firm wants to maintain a 40% debt/assets ratio in its capital structure; it also wants to maintain its past dividend policy of distributing 45% of the prior year?s net income. Last year, net income was $5million. How much external equity must Northern California seek at the beginning of next year to expand capacity as desired?
Paper#10190 | Written in 18-Jul-2015Price : $25