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forecasting financial statements: can someone please help? thanks!! Morrissey Technologies Inc.: Balance Sheet as of December 31, 2021 Morrissey Technologies Inc: Income Statement for December
forecasting financial statements: can someone please help? thanks!!
Morrissey Technologies Inc.: Balance Sheet as of December 31, 2021 Morrissey Technologies Inc: Income Statement for December 31, 2021 Suppose that in 2022, sales increase by 14% over 2021 sales. The firm currently has 100,000 shares outstanding- It expecta to iraintain its 2021 dividend payout ratio and believes that its assets should grow at the same rate as sales. The firm has no excess capscity. However, the firm would like ta reduce its operating costs/sales ratio to 90.5% and increase its total liabilities-to-assets ratio to 30%. (It believes its liabilities-to-assets ratio currently is tog low relative to the industry average.) The firm will raise 30% of the 2022 forecasted interest-bearing debt as notes payable, and it wal issue long-term bonds for the remainder. The firm forecasts that its before-tax cost of debt (which includes both short- and long-term debt) is 13.5%5. Assume that any common stock issuances or repurchases can be made at the firm's current stock price of $81. a. Construct the forecasted financial statements assuming that these changes are made. What are the firm's forecasted notes payable and long-term debt balances? What is the forecasted addition to retained earnings? Round your answers to the nearest cent. Morrissey Technolooles Inc.1 Pro Forma Balance Shaet as of nesamhan at 3 ? b. If the profit margin remains at 3.75% and the dividend payout ratio remains at 40%, at what growth rate in saless will the additional financing requirements be exactly zero? In other words, what is the firm's sustainable growth rate? (Hint: Set AFN equal to zero and solve for g.) Round your answer to two decimal places Step by Step Solution
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