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. 2. Use the following information for Floral Corp. to produce a cash budget and determine the external financing required for May and June. [20 points] The sales for February were $25mln, March were $40min, and April were $35mln. Due to Mother's Day, sales in May are expected to increase by 75% month-over-month and will then decline by 50% month-over-month in June. 60% of sales are in cash, 25% is collected in 1 month, 10% in 2 months, 3% in 3 months, and the remainder is written off as bad debt. Floral Corp. owns shares in Mulch Inc. and bonds in Garden Inc. The shares will pay a $16mln dividend in June and the bonds will make an interest payment of $10min in May. The firm's COGS are 85% of sales. The firm typically pays suppliers 45% in cash, 50% in one month, and the remainder in two months. The firm's salaries have a variable pay component, costing 2% of current month's sales plus a fixed portion of $3min. The remaining monthly fixed expenses total $15min. The firm has debt outstanding with a face value of $50min which is currently priced at $765 per bond. The debt has monthly interest payments, a coupon rate of 6%, and a yield to maturity of 8%. The bonds mature in 6 years. The firm plans to issue new shares in May. The firms market capitalization is currently $20min and the firm has 15min shares currently outstanding Floral Corp. will increase the number of shares outstanding by 15% when they are issued in May. Assume prices will not change. At the end of April, the firm had a cash balance of $70min and wishes to maintain a minimum cash balance of $50min

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