Question
The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Balance Sheet Sales $ 33,000 Assets $ 77,200 Debt $ 40,200 Costs
| The most recent financial statements for Cardinal, Inc., are shown here: |
| Income Statement | Balance Sheet | ||||||||||
| Sales | $ | 33,000 | Assets | $ | 77,200 | Debt | $ | 40,200 | |||
| Costs | 18,650 | Equity | 37,000 | ||||||||
| Taxable income | $ | 14,350 | Total | $ | 77,200 | Total | $ | 77,200 | |||
| Taxes (24%) | 3,444 | ||||||||||
| Net income | $ | 10,906 | |||||||||
| Assets and costs are proportional to sales. Debt and equity are not. A dividend of $4,200 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be $37,950. |
| What is the external financing needed? (Do not round intermediate calculations.) |
Step by Step Solution
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Step: 1
To find the external financing needed we need to determine the increase in assets and equity due to ...
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Corporate Finance Core Principles and Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford
3rd edition
978-0077971304, 77971302, 978-0073530680, 73530689, 978-0071221160, 71221166, 978-0077905200
