Azzzip Company is working at full capacity and that assets, costs, and all liabilities are tied directly to the level of sales. In addition, Company pays out all its earnings as dividends, and sales are expected to increase by 10% next period. The firms debt/equity ratio is 2. The external financing needed to support this growth

Is equal to the growth rate times total assets.

Is equal to half the dollar increase in liabilities.

Is zero since all liabilities are tied directly to the level of sales.