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External Equity Financing
Gardial GreenLights, a manufacturer of energy efficient lighting solutions, has had such success with its new products that it is planning to substantially expand its manufacturing capacity with a $10 million investment in new machinery. Gardial plans to maintain its current 30% debt-to-total-assets ratio for its capital structure and to maintain its dividend policy in which at the end of each year it distributes 25% of the year's net income. This year's net income was $8 million. How much external equity must Gardial seek now to expand as planned? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.
$ million
Bohenick Classic Automobiles restores and rebuilds old classic cars. The company purchased and restored a classic 1957 Thunderbird convertible 6 years ago for ?$8500. Today at ?auction, the car sold for ?$50000. What are the holding period return and..
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Several years ago, the hospital needed additional space and issued bonds to finance the purchase of a new building. Each bond has a face value of $15,000, a 3.8% coupon rate, and a maturity of 20 years. Interest is paid semiannually. The current mark..
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