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

Assume that 3-month treasury bills totaling 32 billion were

Assume that 3-month Treasury bills totaling $32 billion were sold in $10,000 denominations at a discount rate of 6.650%. In addition, the Treasury Department sold 6-month bills totaling $30 billion at a discount rate of ...

Consider a single-stock forward contract on exxon-mobil

Consider a single-stock forward contract on Exxon-Mobil stock. Suppose that the contract expires before Exxon Mobil’s next cash dividend. Consider the following scenario: Risk-free interest rate: r = 3.24% per year, cont ...

1 if a firm presents an income statement and a balance

1. If a firm presents an income statement and a balance sheet, why is it necessary that a statement of cash flows also be presented? 2. Into what three categories are cash flows segregated on the statement of cash flows? ...

Janicek corp is experiencing rapid growth dividends are

Janicek Corp. is experiencing rapid growth. Dividends are expected to grow at 32 percent per year during the next three years, 22 percent over the following year, and then 7 percent per year indefinitely. The required re ...

The next dividend payment by halestorm inc will be 188 per

The next dividend payment by Halestorm, Inc., will be $1.88 per share. The dividends are anticipated to maintain a growth rate of 4 percent forever. The stock currently sells for $37 per share. What is the dividend yield ...

1 what is the difference between the yield to maturity on a

1. What is the difference between the yield to maturity on a coupon bond and the rate of return? 2. What is interest-rate risk? Why does a bond with a longer maturity have greater interest-rate risk than a bond with a sh ...

On its 123113 balance sheet acton inc showed 510 million of

On its 12/31/13 balance sheet, Acton, Inc. showed $510 million of retained earnings, and $700 million was shown in the prior year. Assuming that no earnings restatements were issued, is it possible that Acton paid divide ...

Mr richards needs more analysis to update his client

Mr. Richards needs more analysis to update his client presentations. He would like additional future value calculations. Using the same framework, calculate the future value pf the bank CD's that would pay 1% and 2% annu ...

We are examining a new project we expect to sell 5300 units

We are examining a new project. We expect to sell 5,300 units per year at $67 net cash flow apiece for the next 10 years. In other words, the annual operating cash flow is projected to be $67 × 5,300 = $355,100. The rele ...

1 the common stock of jl recyclers has a required return of

1. The common stock of JL Recyclers has a required return of 12 percent and a current value of $18.72. The company pays its dividend annually and increases the amount by 4 percent each year. You own 300 shares of this st ...

  • 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