Brinkley Resources stock has increased significantly over the last five years, selling now for $225 per share. Management feels this price is too high for the average investor and wants to get the price down to a more typical level, which it thinks is $25 per share. What stock split would be required to get to this price, assuming the transaction has no effect on the total market value? Put another way, how many new shares should be given per one old share? Select the correct answer. a. 10.07 b. 6.86 c. 7.93 d. 11.14 e. 9.00 Norton Electrical has quite a few positive NPV projects from which to choose. The problem is that it has more of these projects than it can finance without issuing new stock and the board of directors refuses to issue any new shares in the foreseeable future. Norton's projected net income is $180 million, its target capital structure is 25% debt and 75% equity, and its target payout ratio is 65%. The CFO now wants to determine how the maximum capital budget would be affected by changes in capital structure policy and/or the target dividend payout policy. Versus the current policy, how much larger could the capital budget be if (1) the target debt ratio were raised to 75%, other things held constant, (2) the target payout ratio were lowered to 20%, other things held constant, and (3) the debt ratio and payout were both changed by the indicated amounts. Select the correct answer. a. If increase debt $165.6 If lower payout $105.2 If do both $489.2 b. If increase debt $169.2 If lower payout $109.4 If do both $493.4 c. If increase debt $166.8 If lower payout $106.6 If do both $490.6 O d. If increase debt $164.4 If lower payout $103.8 If do both $487.8 e. If increase debt $168.0 If lower payout $108.0 If do both $492.0