What will the external financing requirements

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Question - A company has Current Assets of $100 and Fixed Assets of $1100. Current Liabilities are $300 and remaining financing comes from Common Equity. Sales for the current year were $1600 and the profit margin was 10%. No dividends are paid. All non-equity accounts grow proportionally with sales and there are no plans to issue additional equity or to borrow long term debt. The expected sales growth for the coming year is 25%. If current policies are maintained, what will the external financing requirements of the company be in the coming year?

a) There will be more than sufficient funds and the company could pay a $100 dividend

b) There will be more than sufficient funds and the company could pay a $125 dividend

c) Funds of $25 will be needed

d) Funds of $225 will be needed

e) None of the above

Reference no: EM132978405

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