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Q7

Don't copy from Chegg please.

Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes): Income Statement Balance Sheet Sales $ 24,000 Assets $ 10,500 Debt $ 5,800 Costs 14,100 Equity 4,700 Net income $ 9,900 Total $ 10,500 Total $ 10,500 The company has predicted a sales increase of 10 percent. It has predicted that every item on the balance sheet will increase by 10 percent as well. Create the pro forma statements and reconcile them. What is the plug variable here? A firm wishes to maintain an internal growth rate of 11 percent and a dividend payout ratio of 68 percent. The ratio of total assets to sales is constant at 1.1, and the profit margin is 8.1 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be