The (TMBS) Co. is reviewing its debt and dividend policies as well as its capital investment plans. It has grown very rapidly in the past few years and has financed this growth in several ways including debt, new equity, and retained earnings. As part of their strategy they would like to begin paying dividends and would like to review the impact of these dividends upon their capital budget and various sources of financing. Assuming a debt to equity ratio of 25%, and a payout ratio of 80%, you will need to find out what amount of common stock would be required next year if the investment level is $250, and earning are expected to be $200. If TBMS were either unwilling or unable to sell new common stock, then investment policy, or debt policy, or dividend policy would need to be adjusted (by a residual policy). Based on the given information, fill in the blanks of the following matrix. Assume the first currently has $1,000 in equity. No External Equity D/E Resid. Div. No Resid Invest. Resid. Resid. Before Debt of firm total Equity of firm total Debt/asset of firm Investments purchased Earnings Payout Ratio Dividends Earnings Retained External Financing: Debt used for project Equity used for project AFTER: Debt of firm total Equity of firm total Debt/asset The (TMBS) Co. is reviewing its debt and dividend policies as well as its capital investment plans. It has grown very rapidly in the past few years and has financed this growth in several ways including debt, new equity, and retained earnings. As part of their strategy they would like to begin paying dividends and would like to review the impact of these dividends upon their capital budget and various sources of financing. Assuming a debt to equity ratio of 25%, and a payout ratio of 80%, you will need to find out what amount of common stock would be required next year if the investment level is $250, and earning are expected to be $200. If TBMS were either unwilling or unable to sell new common stock, then investment policy, or debt policy, or dividend policy would need to be adjusted (by a residual policy). Based on the given information, fill in the blanks of the following matrix. Assume the first currently has $1,000 in equity. No External Equity D/E Resid. Div. No Resid Invest. Resid. Resid. Before Debt of firm total Equity of firm total Debt/asset of firm Investments purchased Earnings Payout Ratio Dividends Earnings Retained External Financing: Debt used for project Equity used for project AFTER: Debt of firm total Equity of firm total Debt/asset