Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Blinq sells electronics online. Year 2020 Income Statement and ending Balance Sheet are given below: Income statement ($ million) Sales 800 Costs 720 Net

Blinq sells electronics online. Year 2020 Income Statement and ending Balance Sheet are given below: Income  An existing shareholder commits additional $100 paid-in-capital in 2021 (EFN=100), then what will be the  Everything else follows from Intro and Part 1, except the last expectation now is

Blinq sells electronics online. Year 2020 Income Statement and ending Balance Sheet are given below: Income statement ($ million) Sales 800 Costs 720 Net income 80 - Balance sheet ($ million) Current assets Fixed assets Total assets 1,446 964 2,410 - - - Debt 723 Equity 1,687 Total 2,410 - Going into 2021, the expectations are: sales, costs and current assets will grow by a same rate; fixed assets will stay unchanged; will pay NO dividends; will keep debt level unchanged. An existing shareholder commits additional $100 paid-in-capital in 2021 (EFN=100), then what will be the growth rate? 3+ decimals Everything else follows from Intro and Part 1, except the last expectation now is "will keep the debt-equity ratio unchanged", then what will be the growth rate?

Step by Step Solution

3.39 Rating (158 Votes )

There are 3 Steps involved in it

Step: 1

To determine the growth rate in each scenario we need to use the External Financing Needed EFN equation and consider the given expectations 1 Growth R... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Statement Analysis

Authors: K. R. Subramanyam, John Wild

11th edition

78110963, 978-0078110962

More Books

Students also viewed these Finance questions

Question

Compare and contrast the learning theories of Bandura and Rotter.

Answered: 1 week ago