Now using the static trade-off theory

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Sales: 10000

Net profit Margin: .05

Dividend payout ratio: .2

Preferred stock: None

Solve if: The firm has a total change in assets of 1000$. Using the pecking order theory with no restriction on how much debt the firm can use, what is the change in retained earnings? What is the change in common stock? What is the change in debt?

Now using the static trade-off theory (assume that the debt to asset ratio is .what is the change in retained earnings? What is the change in common stock? What is the change in debt?

Reference no: EM132049139

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