Last year, Lory Bookstore used internal ﬁnancing as a source of long-term ﬁnancing for 80% of its total needs.The company borrowed an additional 27% of its total needs in the long-term debt
Markets.What was Lory's net new share issues in that year?
A)-20%
B)-7%
C)0%
D)20%
E)27%

Question

Quizplus · Accepted Answer

Lory Bookstore used 80% internal financing and borrowed 27% in long-term debt, totaling 107%. Since this exceeds 100%, the net new share issues must be -7% to balance the total to 100%.

Last Year, Lory Bookstore Used Internal ﬁNancing as a Source