How much external equity must northern pacific seek

Reference no: EM131525306

Question: Northern Pacific Heating and Cooling Inc. has a 6-month backlog of orders for its patented solar heating system. To meet this demand, management plans to expand production capacity by 40 percent with a $10 million investment in plant and machinery. The firm wants to maintain a 40 percent debt-to-total-assets ratio in its capital structure; it also wants to maintain its past dividend policy of distributing 45 percent of last year's net income. In 2006, net income was $5 million. How much external equity must Northern Pacific seek at the beginning of 2007 to expand capacity as desired?

Reference no: EM131525306

Questions Cloud

Create a personal and household investment plan : Develop a personal and household investment plan. What investment strategies will you use to improve your financial situation?

What was last year dividend per share : Gamma Medical's stock trades at $90 a share. The company is contemplating a 3-for-2 stock split. Assuming that the stock split will have no effect.

Develop measures of performance for an hr assistant : Develop measures of performance for an HR Assistant/Junior HR Analyst position

Create a graphic organizer : Create a graphic organizer that outlines information for all 13 categories of disability under the Individuals with Disabilities Education Act (IDEA).

How much external equity must northern pacific seek : Northern Pacific Heating and Cooling Inc. has a 6-month backlog of orders for its patented solar heating system.

What effect would an increase in the prime rate : What effect would an increase in the prime rate to 4.25% for the entire year have on Matthews's EBR calculated in part (a)?

Conduct implementation plan for your company plan : Your ethical conduct implementation plan for your company plan should include the concepts and ideas covered over the past several weeks

Corporate responsibility and insider trading : What is HR's ethical duty? Explain why this may fall under corporate responsibility and insider trading.

Compute the realized rate of return for an investor : Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called.

User Account

All Pages