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Suppose the Firm Wishes to Maintain a Constant Debt-Equity Ratio

Question 165

Multiple Choice

Suppose the firm wishes to maintain a constant debt-equity ratio, retains 60% of net income, and raises no new equity. Assets and costs maintain a constant ratio to sales. What is the maximum increase in sales the firm can achieve? A) $88 B) $249 C) $371 D) $429 E) $580 Suppose the firm wishes to maintain a constant debt-equity ratio, retains 60% of net income, and raises no new equity. Assets and costs maintain a constant ratio to sales. What is the maximum increase in sales the firm can achieve? A) $88 B) $249 C) $371 D) $429 E) $580 Suppose the firm wishes to maintain a constant debt-equity ratio, retains 60% of net income, and raises no new equity. Assets and costs maintain a constant ratio to sales. What is the maximum increase in sales the firm can achieve?


A) $88
B) $249
C) $371
D) $429
E) $580

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