he most recent financial statements for Alexander Co. are shown here: Income Statement Balance Sheet Sales $50,000 Current assets $78,300 Long-term debt $54,000 Costs 32,000 Fixed assets 43,200 Equity 67,500 Taxable income $18,000 Total $121,500 Total $121,500 Taxes (23%) 4,140 Net income $13,860 Assets and costs are proportional to sales. The company maintains a constant 36 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued?
he most recent financial statements for Alexander Co. are shown here: Income Statement Balance Sheet Sales $50,000 Current assets $78,300 Long-term debt $54,000 Costs 32,000 Fixed assets 43,200 Equity 67,500 Taxable income $18,000 Total $121,500 Total $121,500 Taxes (23%) 4,140 Net income $13,860 Assets and costs are proportional to sales. The company maintains a constant 36 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
|
The most recent financial statements for Alexander Co. are shown here: |
| Income Statement | |||||
| Sales | $50,000 | Current assets | $78,300 | Long-term debt | $54,000 |
| Costs |
32,000 |
Fixed assets | 43,200 | Equity | 67,500 |
| Taxable income | $18,000 | Total |
$121,500 |
Total |
$121,500 |
| Taxes (23%) | 4,140 | ||||
| Net income |
$13,860 |
||||
|
Assets and costs are proportional to sales. The company maintains a constant 36 percent dividend payout ratio and a constant debt-equity ratio. |
|
What is the maximum increase in sales that can be sustained assuming no new equity is issued? |
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