QUESTION 6 Regis Corporation has total assets of $200,000, long-term debt of $50,000, stockholders' equity of $110,000, and current liabilities of $40,000. The dividend payout ratio is 40 percent and the profit margin is 6 percent. Assume all assets and current liabilities change spontaneously with sales and the firm is currently operating at full capacity. What is the external financing need if the current sales of $300,000 are projected to increase by 10 percent? $3,810 $4,120 $4,460 $4,740 $5,030 QUESTION 7 Which of the following statements regarding agency problems and costs are correct? 1. An agency problem exists when there is a conflict of interest between the stockholders and the management of a firm. II. An agency problem exists when there is a conflict of interest between a principal and an agent. III. An agency cost occurs when firm management avoids risky projects that would favorably affect the stock price because the managers are worried about keeping their jobs. IV. An agency cost occurs when management chooses an action that benefits the shareholders but reduces management compensation I and II only O II and III only O I, III, and IV only I, II, and Ill only II, III, and IV only