Determine amount of financing needed by tahoma corporation

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Reference no: EM132643340

Tahoma Corporation wants to determine the additional funds needed for its forecasted sales in the coming year. The forecasted financial information are as follows:

  1. Expected sales is $550,000,000
  2. Operating profit margin is forecasted at 7 percent of sales 
  3. Interest expense is expected to be $450,000 
  4. Tax rate is expected to remain at 28 percent 
  5. Dividend payout ratio is 40 percent 
  6. Increase in working capital is forecasted at 6 percent of sales 
  7. Increase in fixed assets is expected to be 8 percent of sales
  • New equity to be issued is 60 percent of funds required

Problem 1: Given the above information, determine the amount of financing needed by Tahoma Corporation

Reference no: EM132643340

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