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The Four Stars has aftertax income of $62,000 for the year just ended. The company has a residual dividend policy and a target debt-equity ratio
The Four Stars has aftertax income of $62,000 for the year just ended. The company has a residual dividend policy and a target debt-equity ratio of .5. The firm wants to invest $89,000 in a new project. How much new borrowing will be required?
| a. | $44,500 | |
| b. | $2,667 | |
| c. | $17,500 | |
| d. | $29,667 | |
| e. | $59,333 |
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