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1. If sales increase by 20% in 2008 and the compan...

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1. If sales increase by 20% in 2008 and the company uses a strict percentage of sales forecasting model (meaning that all items on the income statement and balance sheet also increase by 20%), what must be the balancing item? What will be its value? 2. If the dividend payout ratio is fixed at 50%, calculate the required total external financing for growth in 2008 of 20% and 25%. 3. What is the maximum possible growth rate if the payout ratio remains 50% percent and (a) no external debt or equity is to be issued (internal growth rate); (b) the firm maintains a fixed debt ratio but issues no equity (sustainable growth rate)?.

 

Paper#8645 | Written in 18-Jul-2015

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