How much equity is required

Assignment Help Business Management
Reference no: EM131210640

Pierre Imports has a capital budget of $20 million.It wants to maintain a capital structure of 45 percent debt and 55 percent equity.This year it expects net income of $8 million. The company has 30 million authorized shares, and 10 million are outstanding.Last year the company paid a dividend of $0.30 per share.

In Excel - 

a. How much equity is required?

b. How much external equity does the company need to raise if it follows a residual dividend policy?

c. How much external equity will the company require if it pays the same dividend as last year?

d. What are 3 advantages following a residual dividend policy?

e. What are 3 disadvantages of following a residual dividend policy?

All must be done in Excel

Reference no: EM131210640

Questions Cloud

What is the company wacc : What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places.
What was a major influence on the religion of israel : The Hebrew Bible is referred to by Jews as "TaNaK", which stands for the three divisions of the Hebrew Bible. What are the three divisions of the Hebrew Bible?
Compute the contribution margin per unit : Compute the contribution margin per unit. -  Prepare a CVP income statement that shows both total and per unit amounts.
Suppose you have determined that person making a argument : Suppose you have determined that a person making a particular argument is egocentric or ethnocentric. Would that determination be sufficient cause for you to dismiss the argument?
How much equity is required : a. How much equity is required? b. How much external equity does the company need to raise if it follows a residual dividend policy? c. How much external equity will the company require if it pays the same dividend as last year?
Calculate the conversion cost per unit : Calculate the prime cost per unit. - Calculate the conversion cost per unit. -  Calculate the total variable product cost per unit.
How do people communicate : Analyze your results for the Student Listening Inventory. What do you do well? What can you improve on? What changes can you make in your behavior to become a better listener? What results do you expect to get from this change?
Present exchange rate on the euro : After obtaining the present exchange rate on the euro determine whether Felicia & Fred should source the crystals domestically or internationally. Support your answer with a calculation and provide the date upon which you sourced the euro exchange..
Working at your first job since college for five year : You have been working at your first job since college for five year. You now wish to buy a house instead of continuing to rent. You can only afford a monthly payment of $1,500. Assuming a 30-year mortgage, and an interest rate of 5.50%, how large ..

Reviews

Write a Review

Business Management Questions & Answers

  General motors and the environment1 characterize gms

general motors and the environment1. characterize gms commitment to the environment?2. do you think this commitment

  Unemployment rates in the near future

What do economists expect will happen to unemployment rates in the near future? And Is the current level of unemployment a burden or an asset to the economy? In what ways?

  Investigate a concept of interest and value

The topics must be in the field of global business or some application (e.g., an application of course concepts to your work situation; a research paper, using a survey or questionnaire to investigate a concept of interest and value; a detailed re..

  Employee empowerment culture and penetration pricing

What would be a good example that could be used to show from any recent or current event in the news, in order to discuss and explain the use of these two specific theories?

  Target group of responsiveness

Global Questions - What are the ways management will notice the ways something is occurring within the target group of responsiveness?

  Miscellaneous itemized deductions

What would Liang's deduction be if he also had $1,000 in qualifying miscellaneous itemized deductions (employee business expenses)? Assume that in part b, the qualifying expenses total $2,700.

  Explain what impact you think the loss of steve jobs has

explain what impact you think the loss of Steve Jobs has, and will have, on Apple's primary stakeholder groups: customers, employees, and investors.

  Discuss a hierarchy of strategy

Discuss a hierarchy of strategy

  Employee empowermentyou work for an organization and have

employee empowermentyou work for an organization and have been tasked with empowering employees in your division. you

  Managerial ethics and corporate social responsibility

What are the key differences between managerial ethics and corporate social responsibility?

  Walk-through audit for a local service business

The objective of this project is to seek opportunities to apply the walk-through audit and knowledge, skills, and tools learned in this class to a real business in seeking ways to improve service operations. Study activities, include, but are not ..

  Evaluate the firm inventory management systems

Evaluate the organization's facilities with regard to capacity and location. Determine whether the organization has enough capacity and whether or not the facilities are strategically located.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd