Can the firm maintain the current capital structure, the current DPS, and maintain the capital budget without having to use external funding? Why or why not? Use a textbox on the worksheet where you have performed your calculations.
What is the minimum dollar amount of new common stock the company would have to issue in order to meet all of its objectives?
You are helping Selena Gomez with another one of her business projects, this time with funding the capital budget. She forecasts that the firm will need $10.0 million in funding. The firm's net income is $6.5 million, and it has paid a $1.50 dividend per share for the past several years on the outstanding 1,000,000 common shares. The shareholders are believed to want this constant dividend for the next several years. The target capital structure is 40% debt and 60% equity.