Firms need for additional external financing


Problem: Explain, whether additional financing is needed in cases "a" to "e".

Indicate whether each of the following would typically increase or decrease a firm's need for additional external financing:

a) An increase in cash dividends

b) An increase in the net profit margin

c) A decrease in the credit period offered by the firm's suppliers

d) A decrease in the credit period offered to the firm's customers

e) An increase in corporate income tax rates

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Finance Basics: Firms need for additional external financing
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