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28 Sep 2019
Parker Prints is in negotiation with two of its largestcustomers to increase theâ firm's sales dramatically. The increasewill require that Parker expand its production facilities at a costof $ 30 million. Parker expects to pay out $ 6 million in dividendsto its shareholders next year. Parker maintains a 20 percent debtratio in its capital structure.
a. If Parker earns $ 14 million nextâ year, how much commonstock will the firm need to sell in order to maintain its targetcapitalâ structure?
b. If Parker wants to avoid selling any newâ stock, how much canthe firm spend on new capitalâ expenditures?
Parker Prints is in negotiation with two of its largestcustomers to increase theâ firm's sales dramatically. The increasewill require that Parker expand its production facilities at a costof $ 30 million. Parker expects to pay out $ 6 million in dividendsto its shareholders next year. Parker maintains a 20 percent debtratio in its capital structure.
a. If Parker earns $ 14 million nextâ year, how much commonstock will the firm need to sell in order to maintain its targetcapitalâ structure?
b. If Parker wants to avoid selling any newâ stock, how much canthe firm spend on new capitalâ expenditures?
Collen VonLv2
28 Sep 2019