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Assume that all costs, assets, and accounts payable change spontaneously with sales. For simplicity's sake, assume interest expense also changes spontaneously with sales (even though
Assume that all costs, assets, and accounts payable change spontaneously with sales. For simplicity's sake, assume interest expense also changes spontaneously with sales (even though you know if may not). The tax rate and dividend payout ratios remain constant. If the firm's managers project a firm growth rate of 16 percent for next year, what will be the amount of external financing needed to support this level of growth?
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