Reference no: EM132019289

The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, “Costs” include interest. Assume that Eagle’s assets are proportional to its sales. Income Statement Sales $ 950 Costs 250 Pretax income $ 700 Taxes (at 28.6%) 200 Net income $ 500 Balance Sheet, Year-End 2017 2016 2017 2016 Assets $ 3,000 $ 2,700 Debt $ 1,000 $ 900 Equity 2,000 1,800 Total $ 3,000 $ 2,700 Total $ 3,000 $ 2,700 a. Find Eagle’s required external funds if it maintains a dividend payout ratio of 60% and plans a growth rate of 15% in revenue, expenses, and assets in 2018. Assume the tax rate remains constant. (Do not round intermediate calculations. Round your answer to 1 decimal place.) External funds needed $ b. If Eagle chooses not to issue new shares of stock, what is the value of debt in 2018? (Do not round intermediate calculations. Round your answer to 1 decimal place.) Value of debt $ c. Suppose that the firm plans instead to increase long-term debt only to $1,100 and does not wish to issue any new shares of stock. What must be the 2018 dividend payment now? (Do not round intermediate calculations. Round your answer to 1 decimal place.) Dividends $