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Page 2 of 41. CHAPTER 3 ST-1 Argent paid $2 in dividends and retained $2 per share. Since total retained earnings rose by $12 million, there must be 6 million shares outstanding. With a book value of $40 per share, total common equity must be $40(6 million) = $240 million. Since Argent has $120 million of debt, its debt ratio must be 33.3%: Debt
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CHAPTER 18 INTERNATIONAL CAPITAL BUDGETING SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS QUESTIONS 1. Why is capital budgeting analysis so important to the firm? Answer: The fundamental goal of the financial manager is to maximize shareholder wealth. Capital