Saanich Heating and Cooling Inc. has a 6-month backlog of orders for its patented solar heating system.

Question:

Saanich Heating and Cooling Inc. has a 6-month backlog of orders for its patented solar heating system. To meet this demand, management plans to expand production capacity by 40% with a $10 million investment in plant and machinery. The firm wants to maintain a 0.67 debt-equity ratio in its capital structure; it also wants to maintain its past policy of distributing 45% of last year's net income. In 2012, net income was $5 million. How much external equity must Saanich seek at the beginning of 2013 to expand capacity as desired? Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...