Q1

An all-equity-financed firm plans to grow at an annual rate of at least 23%. Its return on equity is 35%. What is the maximum possible dividend payout rate the firm can maintain without resorting to additional equity issues? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

Q2

Tne 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2619 Sales $ 266,966 Costs 136,966 EBIT s as, sea Interest expense 16,966 Taxable income $ 64,966 Taxes (at 21%) 131449 Net income $ 56,566 Dividends $ 15,163 Addition to retained earnings $ 35,392 BALANCE SHEET, YEAR-END, 2619 Assets Liabilities Current assets Current liabilities Cash $ 9,666 Accounts payable $ 16,399 Accounts receivable 14,666 Total current liabilities $ 16,669 Inventories 2?,B Long-term debt 166,669 Total current assets $ 56,666 Stockholders' equity Met plant and equipment 296,666 Common stock plus additional paid-in capital 15,669 Retained earnings 59,669 Total assets $ 2595399 Total liabilities plus stockholders' equity $ 2595999 ' Sales and costs are projected to grow at 20% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at 75% capacity. so it plans to increase xed assets in proportion to sales. Interest expense will equal 10% of longterm debt outstanding at the start of the year. The rm will maintain a dividend payout ratio of 0.30. What is the required external financing over the next year? {Enter excess cash as a negative number with a minus sign}