Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Management Expert

Conn Man's Shops, Inc., a national clothing chain, had sales of $300 million previous year. The business has a steady net profit margin of 8 percent and a dividend payout ratio of the 25 percent. The balance sheet for the end of last year is illustrated below.

827_balance sheet.jpg

The firm's marketing staff has told the president that in coming year there will be a big raise in the demand for overcoats and wool slacks. The sales raise of 15 percent is forecast for the company.

All balance sheet items are predicted to maintain the same percent-of-sales relationships as last year, apart from for common stock and retained earnings. No change is scheduled in the number of common stock shares outstanding and retained earnings will change as dictated by the profits and dividend policy of the firm. (Keep in mind the net profit margin is 8 percent.)

a) Will external financing be needed for the company throughout the coming year?

b) What would be the requirement for external financing if the net profit margin went up to 9.5 percent and the dividend payout ratio was raised to 50 percent? Describe.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M9557

Have any Question? 


Related Questions in Financial Management

A stock is currently paying a divident of 100 per share and

A stock is currently paying a divident of $1.00 per share and the growth rate in the dividends is expected to be 3% per year. Suppose investors expect a return of 10% on their investment in this company. Now suppose you ...

Examine the pros and cons of a sinking fund from the

Examine the pros and cons of a sinking fund from the viewpoint of both a firm and its bondholders. Determine the fundamental manner in which this knowledge could be helpful to a financial manager. Provide a rationale for ...

1 which of the following investment decision rules adjusts

1. Which of the following investment decision rules adjusts for the time value of money? A. Average Accounting Rule (AAR) B. Profitability Index C. Payback Period 2. Camille purchased a bond 5 years ago for $1,050. The b ...

Technologist cost per test variable cost per test the

Technologist cost per test Variable cost per test The Center has 1 machine and 1 technologist $ 48 $ 27 As administrative director of the Laboratory you have been asked to see if it is feasible to add more staff to suppo ...

The down and out co just issued a dividend of 246 per share

The Down and Out Co. just issued a dividend of $2.46 per share on its common stock. The company is expected to maintain a constant 4 percent growth rate in its dividends indefinitely. If the stock sells for $35 a share, ...

Jeans manufacturing thinks that it can reduce its high

Jeans Manufacturing thinks that it can reduce its high credit costs by tightening its credit standards. However, as a result of the planned tightening, the firm believes its annual sales will drop from $38 million to $36 ...

1 draw a demand and supply graph for bonds that shows the

1. Draw a demand and supply graph for bonds that shows the effect on a bond that has its rating lowered. Be sure to show the demand and supply curves and the equilibrium price of the bond before and after the rating is l ...

6 years ago blue lake corp issued 30 years to maturity zero

6 years ago Blue lake Corp. issued 30 years to maturity zero coupon bonds with a par value of $5,000. the current interest rate on this type of bond is 10.71 percent compounded annually. What is the current price of the ...

Indigo ink supply paid a dividend of 45 last year on its

Indigo Ink Supply paid a dividend of $4.5 last year on its common stock. It is expected that this dividend will grow at a rate of 8% for the next five years. After that, the company will settle into a slower growth patte ...

Company z carries a portfolio consisting of two investments

Company Z carries a portfolio consisting of two investments, A and B. Its portfolio mix is onethird for Investment A which has an expected return of 18 percent and two-thirds for Investment B with an expected return of 9 ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro