External funding and growth rate

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• A firm with 30% total debt ratio, total assets of $10 million, and an ROE of 11% has been paying out 60% of earnings to shareholders in the form of dividends. Sales are expected to increase by 15% this year, a faster growth rate than usual. Will external funding be required under these conditions? If so how much? Will the debt-equity ratio remain constant? Show your calculations

  Sales are expected to increase by 15% this year, a faster growth rate than usual. Will external funding be required under these conditions? If so how much? Will the debt-equity ratio remain constant?

• Alternatives to finance overseas investment

  As stated earlier, the MNE can look at external and internal sources. The external sources we will explore include: growth capital equity offerings, bank loans, lines of credit and mortgages.

• External capital and pro forma balance sheet

  for year 2006 then we need to assume some growth rate of sales in year 2005 and then take the effect of both growth in 2005 and 2006.

• How much additional external capital will be required for next year if sales increase 15%?

  Reduction in payout ratio --------- The external funding required will reduce Slower growth rate ----------Lower total funds required and hence the external fund requirement will reduce Declining profits ---------Lower earning ----lower retained earnings

• Funding the greenfield abroad - Greenfield Financing

  As stated earlier, the MNE can look at external and internal sources. The external sources we will explore include: growth capital equity offerings, bank loans, lines of credit and mortgages.

• Parts of a Business Plan; Risk and External Funding

  543057 Parts of a Business Plan, Including Risk and External Funding, importance of interest rates, how to calculate need of external funding, description of financial plan. Hello, 1. Explain the parts of the business plan. 2.

• Mansfield Corporation had 2007 sales of $100 million.

  Reduction in payout ratio: This will cause the external funding required to reduce. Slower growth rate: It will lower total funds required, and hence, the external fund requirement will be reduced.

• External Financing Requirements

  (1) The first is the growth of the firm. When the firm is growing quickly, they need more capital and so the greater need drives requirement to go outside the firm for capital (internal funding isn't large or quick enough for high growth).

• Internal versus external equity financing

  When the firm is in rapid growth phase and cash reserve are not enough to fund the capital expenditure. ? When the external markets are favorable ? When the firm has stable dividend policy Cases where the internal funds are chosen: ?