Problemsheehan corp is forecasting an eps of 400 for the, Ask an Expert

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Problem:

Sheehan Corp. is forecasting an EPS of $4.00 for the coming year on its 500,000 outstanding shares of stock. Its capital budget is forecasted at $850,000, and it is committed to maintaining a $3.00 dividend per share. It finances with debt and common equity, but it wants to avoid issuing any new common stock during the coming year.

Required:

Given these constraints, what percentage of the capital budget must be financed with debt?

Note: Be sure to show how you arrived at your answer.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162761

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