WorldTrans is forecasting an EPS of $5.00 for the coming year on its 500,000 outstanding shares of stock. Its capital budget is forecasted at $625,000, and it is committed to maintaining a $4.00 dividend per share. It finances with debt and common equity, but it wants to avoid issuing any new common stock during the coming year. Given these constraints, what percentage of the capital budget must be financed with debt? Group of answer choices 24.00% 22.40% 20.00% 21.60% 23.60%

WorldTrans is forecasting an EPS of $5.00 for the coming year on its 500,000 outstanding shares of stock. Its capital budget is forecasted at $625,000, and it is committed to maintaining a $4.00 dividend per share. It finances with debt and common equity, but it wants to avoid issuing any new common stock during the coming year. Given these constraints, what percentage of the capital budget must be financed with debt? Group of answer choices 24.00% 22.40% 20.00% 21.60% 23.60%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 11P

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