1. A) How much is the cash and retained earning in 2019?, B) Bigquiz can borrow at 10% interest rate, if the company starts to borrow, do you think borrowing will increase or decrease the firms ROE? Why?, C)the firm targets a 30% growth rate next year, and the firm doesnt want to issue new equity, how to finance? (suppose profit margin, asset turnover ratio, payout ratio remain constant over the period).

Bigquiz Corporation (in millions) 2018 2019 sales 800 cost of goods sold 600 depreciation 60 interest rate 10.0% payout 40.0% tax rate 35.0% account receivable 30 cash 20 inventory 24 40 net fixed asset 330 360 account payable 0 0 note payable 0 0 long-term debt 0 0 common stock 100 100 retained earning 300 shares outstanding 10 26