1. What is Major Manuscripts, Inc.s retention ratio?

2. Major Manuscripts, Inc. does not want to incur any additional external financing. The dividend payout ratio is constant. What is the firms maximum rate of growth?

3. If Major Manuscripts, Inc. decides to maintain a constant debt-equity ratio, what rate of growth can it maintain assuming that no additional external equity financing is available.

Question # 2: Slide # 24 (Comprehensive Problem) XYZ has the following financial information for 2019: Sales = $2M, Net Inc. = $0.4M, Div. = $0.1M C.A. = $0.4M, F.A. = $3.6M C.L. = $0.2M, LTD = $1M, C.S. = $2M, R.E. = $0.8M 1) What is the sustainable growth rate?

2) If 2020 sales are projected to be $2.4M, what is the amount of external financing needed, assuming XYZ is operating at full capacity, and profit margin and payout ratio remain constant?

Chapter 04 FIN 415 Question #01 Major Manuscripts, Inc. 2009 Income Statement Net sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income Taxes Net income Dividends $950 $16,800 11,200 1.650 3,950 350 $3,600 1.224 $2,376 Major Manuscripts, Inc 2009 Balance Sheet 2009 Cash Accounts rec Inventory Total Net fixed assets Total assets 2009 $1,040 650 7.500 $9,190 11,400 $20,590 Accounts payable Long-term debt Common stock Retained earnings $3,300 2,780 10,000 4510 Total liabilities & equity $20,590