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

What if another investor requires only a 5 yield would he

What if another investor requires only a 5% yield. Would he buy the bond of Exercise at a premium or a discount price? Exercise A $2,000 bond is redeemable at a coupon rate of 6.5% in 10 years. Would you purchase it at p ...

Business and professional communication1- what is the

BUSINESS AND PROFESSIONAL COMMUNICATION 1- What is the difference between denotative and connotative meanings? 2- What words can you think of that have different denotative and connotative meanings? 3- Have you ever been ...

Common stock valuemdashconstant growthmccracken roofing inc

Common stock value—Constant growth McCracken? Roofing, Inc., common stock paid a dividend of ?$1.35 per share last year. The company expects earnings and dividends to grow at a rate of 6?% per year for the foreseeable fu ...

1 determine the degree of operating leverage for a firm

1. Determine the degree of operating leverage for a firm that has the percentage change in sales equal to 35% and the percentage change in operating income is 46% 2. Calculate the degree of combined leverage (DCL) if you ...

Calculate the weighted-average cost of capital for a firm

Calculate the weighted-average cost of capital for a firm with the following capital, weight, and cost of capital for the individual sources. Capital Source Percent of Capital Cost of Individual Source ($) Preferred stoc ...

Break-even ebit with and without taxesalpha company is

Break-even EBIT? (with and without taxes). Alpha Company is looking at two different capital? structures, one an? all-equity firm and the other a levered firm with ?$2.88 million of debt financing at 8% interest. The? al ...

1 explains how your cash deposited in a bank can grow over

1. Explains how your cash deposited in a bank can grow over time. Some people are only willing to save if they are rewarded with a high interest rate. However, the interest rate on deposits has been relatively low lately ...

Finance charges- bill wants to purchase a new car for 45000

Finance Charges- Bill wants to purchase a new car for $45,000. Bill has no savings, so he needs to finance the entire purchase amount. With no down payment, the interest rate on the loan is 13% and the maturity of the lo ...

Exquisite fashion limited expects its sales to increase 20

Exquisite Fashion Limited expects its sales to increase 20% next year from its current level of $4.7 million. The company has current assets of $660,000, net fixed assets of $1.5 million, and current liabilities of $462, ...

1 why must incremental after-tax cash flows rather than

1. Why must incremental, after-tax, cash flows, rather than total cash flows, be evaluated in project analysis? 2. Differentiate between sunk costs and opportunity costs. Which of these costs should be included in increm ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen