Sheehan Corp

question 64

Multiple Choice

Sheehan Corp.is forecasting an EPS of $5.00 for the coming year on its 500,000 outstanding shares of stock.Its capital budget is forecasted at $700,000,and it is committed to maintaining a $4.00 dividend per share.It finances with debt and common equity,but it wants to avoid issuing any new common stock during the coming year.Given these constraints,what percentage of the capital budget must be financed with debt?

• A) 23.14%
• B) 35.43%
• C) 31.43%
• D) 29.43%
• E) 28.57%

---

Definitions:

Machinery Manufacturers

Entities involved in the production of machines and industrial equipment.

Virtual Marketing Channel

Digital pathways through which companies promote and sell their products or services online, using platforms such as social media and websites.

Dual Distribution

A strategy where a manufacturer sells products through multiple distribution channels, often including directly to consumers and through resellers or agents.

Distribution Density

The extent of a product's availability across a geographic area or within a distribution network, influencing market saturation.