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Author Question: Last year Gator Getters, Inc had 50 million in total assets. Management desires to increase its ... (Read 39 times)

Themember4

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on: Jul 10, 2018
Last year Gator Getters, Inc had 50 million in total assets. Management desires to increase its plant and
  equipment during the coming year by 12 million.
 
  The company plans to finance 40 percent of the expansion
  with debt and the remaining 60 percent with equity capital. Bond financing will be at a 9 percent rate and will
  be sold at its par value. Common stock is currently selling for 50 per share, and flotation costs for new common
  stock will amount to 5 per share. The expected dividend next year for Gator is 2.50. Furthermore, dividends
  are expected to grow at a 6 percent rate far into the future. The marginal corporate tax rate is 34 percent.
  Internal funding available from additions to retained earnings is 4,000,000.
  a. What amount of new common stock must be sold if the existing capital structure is to be maintained?
  b. Calculate the weighted marginal cost of capital at an investment level of 12 million.

Question 2

Office Clean Corporation has a capital structure consisting of 30 percent debt and 70 percent common equity.
 
  Assuming the capital structure is optimal, what amount of total investment can be financed by a 35 million
  addition to retained earnings without selling new common stock?
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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cici

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Reply #1 on: Jul 10, 2018
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Themember4

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Reply 2 on: Jul 10, 2018
Great answer, keep it coming :)

lindahyatt42

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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