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Determining the firm target debt ratio

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Reference no: EM132402840

Use the following information to answer Questions a &b RST Enterprises has identified Group 1 projects requiring Capital in the amount of $115 Million in the coming year. Invested Capital at the beginning of the year is $750 Million and ROIC = 12%. The firm's target Debt Ratio is 55%.

a.Assuming RST fully funds its business plan, what is Net New Financing Provided (NNFP)?

Group of answer choices

  • $25.0 Million
  • -$635.0 Million
  • $13.8 Million
  • -$22.5 Million

b. Assuming again that the firm fully funds its business plan, its financial planning for the coming year should certainly include the issuance of _________ in _________.

Group of answer choices

  • $63.25 Million; new Shares of Stock
  • $115.00 Million; new Debt
  • $63.25 Million; new Debt
  • $90 Million; Dividends

Reference no: EM132402840

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