Decker EnterprisesBelow are the simplified current and projected financial statements for Decker Enterprises. All of Decker's assets are operating assets. All of Decker's current liabilities are operating liabilities. Income statementCurrent
Projected Salesna
1,500
Costsna
1,080
Profit before taxna
420
Taxes (25%)na
105
Net incomena
315
Dividendsna
95
Balance sheetsCurrentProjected CurrentProjectedCurrent assets 100
115
Current liabilities 70
81
Net fixed assets 1,200
1,440
Long-term debt 300
360
Common stock 500
500
Retained earnings 430
650
If Decker had a financing surplus, it could remedy the situation by
A. borrowing on its line of credit.
B. issuing more common stock.
C. reducing its dividend.
D. borrowing from its retained earnings
E. paying a special dividend
Answer: E
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