A. If Colombia decides to maintain a constant debt-equity ratio, what rate of growth can it maintain assuming that no additional equity financing is available? Colombias 2015 Dividend = $4,500

B. If Colombia does not want to incur any additional financing and the dividend payout rate is constant, then what is the firms maximum rate of growth?

C. All of Colombias costs, asset accounts, and current liabilities vary directly with sales. The tax rate and dividend payout ratio will remain constant. How much additional debt is required if no new equity is raised and sales are projected to increase by 15% in 2013?

18 Colombia Communications 2015 Income Statement 2016 Forecast Revenue $120,000 82,500 Cost of Goods Sold 9,250 Depreciation 28,250 EBIT Interest Expense 3,500 $24,750 Taxable Income 5,130 Taxes Net Income $19,620 2015 Balance Sheet 2015 2016 $90,240 Current Assets Accounts Payable Net Fixed Assets 120,360 Long-term Debt Com Stock & RE $210,600 Total Assets Total Liab & Equity 2015 $63,350 40,800 106,450 $210,600 2016