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The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, Costs include interest. Assume that Eagle's assets are proportional to
The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs include interest. Assume that Eagle's assets are proportional to its sales. Income Statement Sales $4,15 Costs 1,850 Pretax income $2,300 Taxes (at 40.0%) 920 Net income $1,380 2019 $ 6,200 Net assets Balance Sheet, Year-End 2018 $5,900 Debt Equity $ 5,900 Total 2019 $ 2,600 3,600 $ 6,200 2018 $ 2,500 3,400 $ 5,900 Total $ 6,200 a. Find Eagle's required external funds if it maintains a dividend payout ratio of 50% and plans a growth rate of 30% in revenue, expenses, and assets in 2020. Assume the tax rate remains constant. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) External funds needed b. If Eagle chooses not to issue new shares of stock, what is the value of debt in 2020? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Value of debt c. Suppose that the firm plans instead to increase long-term debt only to $3,500 and does not wish to issue any new shares of stock. What must be the 2020 dividend payment now? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Dividends
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