a. Find Eagle's required external funds if it maintains a dividend payout ratio of 70% and plansa growth rate of 15% in 2020.b. If Eagle chooses not to issue new shares of stock, what variable must be the balancingitem?c. What will be the value of this balancing item?d. Now suppose that the firm plans instead to increase long-term debt only to $1,100 and doesnot wish to issue any new shares of stock. What is now the balancing item?e. What will be the value of this new balancing item? 12. Using Percentage of Sales. Eagle Sports Supply has the following financial statements.Assume that Eagle's assets are proportional to its sales. (LO18-2)INCOME STATEMENT, 2019Sales$950Costs250Interest50Taxes150Net income$500BALANCE SHEET, YEAR-END2018201920182019Assets$2,700$3,000Debt$ 900$1,000Equity1,8002,000$3,000Total$2,700$3,000Total$2,700

1. Raising capital: Companies can raise capital through issue of share, debenture , bonds etc. 2.…

12. Using Percentage of Sales. Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales. (LO18-2) INCOME STATEMENT, 2019 Sales $950 Costs 250 Interest 50 Тахes 150 Net income $500 BALANCE SHEET, YEAR-END 2018 2019 2018 2019 Assets $2,700 $3,000 Debt $ 900 $1,000 Equity 1,800 $2,700 2,000 Total $2,700 $3,000 Total $3,000

12. Using Percentage of Sales. Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales. (LO18-2) INCOME STATEMENT, 2019 Sales $950 Costs 250 Interest 50 Тахes 150 Net income $500 BALANCE SHEET, YEAR-END 2018 2019 2018 2019 Assets $2,700 $3,000 Debt $ 900 $1,000 Equity 1,800 $2,700 2,000 Total $2,700 $3,000 Total $3,000

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter15: Harvesting The Business Venture Investment

Section: Chapter Questions

Problem 1fM

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