A firm with a 30% total debt ratio, total assets of $10 million, and an ROE of 14% has been paying out 60% of earnings to shareholders in the form of dividends. Sales are expected to increase by 10% this year, a faster growth rate than usual. Will external funding be required under these conditions? Will the debt-equity ratio remain constant?

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The Answer of A firm with a 30% total debt ratio, total assets of $10 million, and an ROE of 14% has been paying out 60% of earnings to shareholders in the form of dividends. Sales are expected to increase by 10% this year, a faster growth rate than usual. Will external funding be required under these conditions? Will the debt-equity ratio remain constant?

A Firm with a 30% Total Debt Ratio, Total Assets