A firm expects to have available $500,000 of earnings in the coming year, which it will retain for reinvestment purposes. Given the following target capital structure, at what level of total new financing will retained earnings be exhausted?
A. $500,000.
B. $800,000.
C. $1,000,000.
D. $1,500,000.
Answer:C
A firm expects to have available $500,000 of earnings in the coming year, which it will retain for reinvestment purposes. Given the following target capital structure, at what level of total new financing will retained earnings be exhausted?
A. $500,000. B. $800,000. C. $1,000,000. D. $1,500,000.