AFN 1. Calculate the proforma income statement and balance sheet assuming 30% growth (use the constant growth method and assume the company is at full capacity). Assume additional funds needed will come from 50% LTD and 50% from a common stock issue. Interest on the debt is 10% and the common stock will sell for $50 per share and pay $0.50 per share in dividends.

Income Statement 1st Pass Forecast Year 2nd Pass Forecast Year Yr 0 7800 Sales CGS Depr EBIT Interest EBT Taxes (25%) Net Income Div Add to RE $ 6000 5000 400 1.3 $ 600 100 $ 500 125 $ 375 100 $ 275 3900 3900 80 80 Balance Sheet Total Assets AP NP Accrued Wages Current Liab LTD Common Stock Retained Earnings Total Common Eq T. Liab & Equity $3000 $ 60 80 60 $ 200 800 1000 1000 $ 2000 $ 3000 Income Statement 1st Pass Forecast Year 2nd Pass Forecast Year Yr 0 7800 Sales CGS Depr EBIT Interest EBT Taxes (25%) Net Income Div Add to RE $ 6000 5000 400 1.3 $ 600 100 $ 500 125 $ 375 100 $ 275 3900 3900 80 80 Balance Sheet Total Assets AP NP Accrued Wages Current Liab LTD Common Stock Retained Earnings Total Common Eq T. Liab & Equity $3000 $ 60 80 60 $ 200 800 1000 1000 $ 2000 $ 3000