Problem

External Funds Needed The Optical Scam Company has forecast a 15 percent sales growt...

External Funds Needed The Optical Scam Company has forecast a 15 percent sales growth rate for next year. The current financial statements are shown here:

a. Using the equation from the chapter, calculate the external funds needed for next year.

b. Construct the firm’s pro forma balance sheet for next year and confirm the external funds needed that you calculated in part (a).

c. Calculate the sustainable growth rate for the company.

d. Can Optical Scam eliminate the need for external funds by changing its dividend policy? What other options are available to the company to meet its growth objectives?

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