Asset turnover = 1.40 ? Profit margin = 5% ? Payout ratio = 25% ? Equity/Assets = 0.60
We have the financial statements for Eagle Sports Supply. Now suppose: Eagle’s assets are proportional to its sales.
A- Question:
1-If it maintains a dividend payout ratio of 70% and plans a growth rate of 15% in 2013, what is the required external funds?
2-If Eagles does not issue new shares of stock, what variable must be the balancing item? What will its value be?