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4. Your firm has current period earnings available to common stockholders of $400 and a dividend payout ratio of 30%. Calculate the values for ARE,
4. Your firm has current period earnings available to common stockholders of $400 and a dividend payout ratio of 30%. Calculate the values for ARE, A Common Stock, and A Debt under the two theories below: 1. The pecking order theory, with no restriction on debt. 2. The static trade-off theory, with a target debt to total assets ratio of 40%. The necessary change in total assets is $1,000. (5) a. b. Same as part a, except the dividend payout ratio is now 10%. (5) c. Same as part a, except the necessary change in total assets is $200
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