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How much new debt will it have to take on in order

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Reference no: EM132020097

Sweetums Inc., a confectioner best known for its mint ogre balls, uses the residual dividend model to set its dividends. Selected financial information for Sweetums Inc. is provided in the table below.

Given the investment plan summarized in the table, how much new debt will it have to take on in order to maintain its target capital structure?

Selected Financial Information of Sweetums Inc

Net Income $90 million
Equity capital structure weight 0.60
Investments $100 million
Dividends $0.30 per share

 

Reference no: EM132020097

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