When creating pro forma statements,the external financing need will increase if you
A)increase the corporate tax rate.
B)decrease the dividend payout ratio.
C)increase the plowback ratio.
D)decrease the rate of sales growth.
E)decrease the projected level of sales.

Question

Quizplus · Accepted Answer

Increasing the corporate tax rate reduces the amount of net income available to the firm, potentially increasing the need for external financing to support operations or growth initiatives.

When Creating Pro Forma Statements,the External Financing Need Will Increase