Clothing depot maintains a debt-equity ratio
Course:- Financial Management
Reference No.:- EM13942906

Assignment Help >> Financial Management

The Clothing Depot maintains a debt-equity ratio of .50 and follows a residual dividend policy. The firm needs $2,700 for new investments next year. The after-tax earnings this year are $1,700. What is the amount that the Clothing Depot will pay out in dividends for this year? Please show all work.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Revise your pro forma financial statements for 1996 and 1997 on the basis of the following assumptions: a. Short-term loans will be repaid when sufficient cash is available to
Zenith Propulsion, Inc., is expected to pay a dividend next year of $2.15 per share. Investors think that Zenith will continue to increase its dividend by 6% each year for the
Stock A has exhibited a standard deviation in stock returns of 0.5, whereas Stock B has exhibited a standard deviation of 0.6. The correlation coefficient between the stock re
You own a portfolio that has $3,300 invested in Stock A and $4,300 invested in Stock B. If the expected returns on these stocks are 11 percent and 14 percent, respectively, wh
Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.71 million at the end of the first year, and these savings will grow at a rate
Cake is a product of the Chester Company. Chester's sales forecast for Cake is 1,439 in the Americas region. Chester wants to have an extra 10% on hand above their forecasted
Industrial Camel Lights is expected to have $20 millions in free cash flows next year. The growth rate of free cash flows is expected to be 14% in the following year, 12% in t
A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year Cash Flow 0 –$ 27,200 1 11,200 2 14,20