Question
A company with a target D/E ratio of 1.6 reported earnings of $760,000 for the period just ended. If $608,000 was the addition to retained
A company with a target D/E ratio of 1.6 reported earnings of $760,000 for the period just ended. If $608,000 was the addition to retained earnings and the company uses a residual dividend policy, what will be the increase in borrowing to maintain its target D/E ratio?
Step by Step Solution
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Step: 1
To calculate the increase in borrowing to maintain the target debttoequity DE ratio we need to first ...
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Fundamentals Of Corporate Finance
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan
6th Edition
0072553073, 9780072553079
