What is the efn to achieve the projected growth rate

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Reference no: EM13208140

Use the model developed in the Excel spreadsheet to answer the following questions:

1. What is the EFN to achieve the projected 50% growth rate (change the Notes Payable, Long-term debt, and common equity to make the balance sheet balanced)?

2. In your financial forecast, what would happen to the EFN, if the dividend payout ratio were increased to 35%? Provide the numerical answer. In addition to the numerical answer, try to explain it from the interaction involving the different variables on the income statement and the balance sheet.

3. If the firm is reluctant to use additional external financing due to the tight credit market and equity market, what is the maximum growth rate in sales that you forecast for the firm? Assume that the firm do not want to increase its financial risk (i.e. current ratio>=2.6 and debt ratio<=0.43). As a financial consultant, what is your advice on its dividend payout policy, if the firm wants to achieve a higher growth rate? Support your advice in light of your answer to the question above.


Attachment:- Financial-Forecasting-Homework.pdf

Reference no: EM13208140

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