Target capital structure is debt and equity

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Reference no: EM13913325

Kendra Brown is analyzing the capital requirements for Reynolds Corporation for next year. Kendra forecasts that Reynolds will need $25 million to fund all of its positive-NPV projects, and her job is to determine how to raise the money. Reynolds’s net income is $16 million, and it has paid a $3 dividend per share (DPS) for the past several years (1 million shares of common stock are outstanding); its shareholders expect the dividend to remain constant for the next several years. The company’s target capital structure is 40% debt and 60% equity.

Reference no: EM13913325

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