How much fund should be raised from shareholders

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Question - The most recent financial statements for Company Y, follow. Sales for 2021 are projected to grow by 24 percent. Interest expense will be increased to $200; the tax rate is 28%. Current assets increase spontaneously with sales. Costs-to-Sales ratio would be 90%, payout ratio will be 30%, and accounts payable will be increased by $50. If the firm is operating at 93% capacity and no new debt or equity is issued, what external financing is needed to support the growth rate in sales? Formula is not needed.

If the company decides to have a long-term Debt to Equity Ratio of 50%, how much fund should be raised from shareholders. Show your working.

Reference no: EM133009059

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