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What percentage of the capital budget must be financed

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Question - Sheehan Corp. is forecasting an EPS of P3.00 for the coming year on its 400,000 outstanding shares of stock. Its capital budget is forecasted at P800,000, and it is committed to maintaining a P2.00 dividend per share. It finances with debt and common equity, but it wants to avoid issuing any new common stock during the coming year. Given these constraints, what percentage of the capital budget must be financed with debt?

a. 55.56%

b. 37.50%

c. 44.45%

d. 35.63%

e. 50.00%

Reference no: EM132955155

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