A) How much is the cash and retained earning in 2019?, 

B) Bigquiz can borrow at 10% interest rate, if the company starts to borrow, do you think borrowing will increase or decrease the firms ROE? Why?, 

C) The firm targets a 30% growth rate next year, and the firm doesn’t want to issue new equity, how to finance? (suppose profit margin, asset turnover ratio, payout ratio remain constant over the period).

 

Bigquiz Corporation (in millions) 2018 2019 sales cost of goods sold depreciation interest rate payout tax rate 800 600 60 10.0% 40.0% 35.0% account receivable cash inventory net fixed asset account payable note payable long-term debt 26 30 20 24 40 330 360 common stock retained earning shares outstanding 100 100 300 10