4 4 Comment on your answers to questions (2) & (3), how would an increase in debt or equity impact the ROE and debt to equity ratios? (8 Points) Enter your answer 5 If the company has a strict target of not exceeding a Debt-Equity ratio of 65%, which option (raising debt or raising equity) would be the preferred option for the company based on your answers to questions (2) & (3)? (7 Points) Raising Debt O Raising Equity 12:54 1 BUSI 2093 - Case Study (1) (BUSI 2093 Intr... ABC Inc. is a juice producer which has been growing steadily for the past 5 years. According to the expected market demand, the company is planning to grow its sales at 15% next year. Since the company is currently operating at full capacity, fixed assets will also grow proportional to sales, same as current assets and current liabilities. However, long-term debt and equity will not grow proportional to sales but rather management will decide upon their next year level based on an acceptable level of debt to equity ratio as well as ROE ratio. The company has a dividend pay-out ratio of 40%, which the management want to maintain in order to meet the shareholders' expectations. Below are the financial statements of ABC Inc. for the year ending Sept 2020. 1) Determine the value of the "External money needed" for next year. (Do not round intermediate calculations. Round the final answer to 2 decimal places, Omit commas, spaces and $ sign) (10 Points) ABC Income statement ABC Balance Sheet Cole Tatian TREES (34 Noticon 4.200 590 Canh Account Receivable Inwertery Current 200 Resource 1800 per 2,100 Current 2.300 3.000 Longer 2.750 2.700E 12.000 Total 12.000 Total Enter your