Which is likely to increase a company's additional funds needed (AFN)?
Not what you're looking for? Search our solutions OR ask your own Custom question.
All else equal, which of the following is likely to increase a company's additional funds needed (AFN)?
A. An increase in its dividend payout ratio.
B. The company has a lot of excess capacity
C. Accounts payable increase faster than sales.
D. All the statements above are correct.
E. None of the statements above is correct.
https://brainmass.com/business/finance/increase-companys-additional-funds-needed-afn-28864
Solution Preview
AFN = (A*/S)DS - (L*/S)DS - (M)(S1)(RR).
If the firm's dividend payout ratio increases, (RR) will decrease. This will decrease the value of ...
Solution Summary
The solution provides the correct answer, but also explains why the other responses are incorrect.
$2.49