Carroll Co. is forecasting EPS of $3.00 this year on its 500,000 shares of stock outstanding. Its capital budget for the upcoming year will be $800 million. The company is also committed to maintaining its $2.00 dividend per share (DPS), and it wants to avoid issuing new common stock. The company’s capital structure consists of debt and common stock. Given the above constraints, what portion of the capital budget will be funded with debt?,,a. 27.5%,b. 30%,c. 32.5%,d. 35%,e. 37.5%
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