How much new total debt must the firm acquire

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Reference no: EM13850796

Cross Town Express has a sale of $137,000, net income of $14,000, total assets of $98,000, and total equity of $45,000. The firm paid $7,560 in dividends and maintains a constant dividend payout ratio. Currently, the firm is operating at full capacity. All costs and assets vary directly with sales. The firm does not want to obtain any additional external equity. At the sustainable rate of growth, how much new total debt must the firm acquire?

A. $0

B. $6311

C. $6989

D. $7207

E. $8852

Reference no: EM13850796

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