Financial Statements for Royal Corporation

Actual $2016$ and Pro Forma $2017($$ millions$)$

Income Statement Balance Sheet

$2016201720162017$

Net sales $ $47,616$ $ $52,378$ Cash & securities $ $951$ $ $1,046$

Cost of goods sold $40,71844,790$ Accounts receivable $5,6666,233$

Other expenses $5,1715,688$ Inventories $4,2364,660$

Depreciation expense $1,0001,100$ Net fixed assets $4,048$

EBIT $727800$ Total assets $14,901$

Interest expense $215215$

Earnings before tax $512585$ Bank loan $($short$-$term$)$ $ $392$ $ $431$

Tax $154176$ Accounts payable $7,4198,161$

Net income $ $359$ $ $409$ Long$-$term debt $2,148$

Total liabilities $9,959$

Dividends paid $90102$ Shareholders' equity $4,942$

Add. to retained earnings $ $269$ Total liabilities & equity $ $14,901$

Please refer to the pro forma financial statements for Royal Corporation above. If Royal Corporation plans to issue $$100$ in new equity in $2017,$ what should be the projection for shareholders$$ equity for $2017?$

Multiple Choice

$$5,436$

$$5,536$

$$5,451$

$$5,349$