Management is concerned with its sales, net income, and new capital needs during the coming two years. Mr. X, calculating a sales growth rate of 6.67 %, and a profit margin of 10 percent, believes that no new capital will be needed. Ms Y, has calculated a sales growth rate of 5.24%, and sees positive EFN. Furthermore, Ms Y believes that EPS is maximized with debt issuance. Who is correct?

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Sales, 1993, Sales, 2003, $15,000,000 $25,000,000 Net Income, 2003 Dividends, 2003 Shares Outstanding Stock Price 2,499,999 1,000,000 1,000,000 $50 Tax rate 35% Current Assets $10,000,000 Total Assets 12,500,000 Current Liabilities 7,500,000 Long-Term Debt 1,500,000 Stockholder Equity 3,500,000