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The most recent financial statements for a Co. are shown here: Income Statement Balance Sh

The most recent financial statements for a Co. are shown here: Income Statement Balance Sh

The most recent financial statements for a Co. are shown here: Income Statement Balance Sheet Sales $ 52,000 Current assets $ 21,400 Long-term debt $ 39,000 Costs 42,000 Fixed assets 90,000 Equity 72,400 Taxable income $ 10,000 Total $ 111,400 Total $ 111,400 Taxes (34%) 3,400 Net income $ 6,600 Assets and costs are proportional to sales. The company maintains a constant 25 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?

 

Abhinav 02-Dec-2019

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