Residual dividend mode-dividend payout ratio

Assignment Help Financial Management
Reference no: EM13932870

Residual dividend model Axel Telecommunications has a target capital structure that consists of 70% debt and 30% equity. The company anticipates that its capital budget for the upcoming year will be $3,000,000. If Axel reports net income of $2,000,000 and it follows a residual dividend payout policy, what will be its dividend payout ratio? Round your answer to two decimal places.

Reference no: EM13932870

Questions Cloud

Identify and explain the ways that humans learn : Identify and explain the ways that humans learn (reading, writing, speaking, listening). Analyze yourself in relation to your strongest and weakest areas of learning and provide examples that reflect how you plan on improving your learning skills
What percentage of alcohol-impaired driving would you use : what percentage of alcohol-impaired driving would you use if you are working for the insurance company and you want to be conservative by using the likely worst case scenario?
What is stanleys eoq in boxes : Suppose Stanley's Office Supply purchases 50,000 boxes of pens every year. Ordering costs are $80 per order and carrying costs are $0.40 per box. What is Stanley's EOQ in Boxes? Enter your answer rounded to two decimal places.
What is the amount of ending inventory : what is the amount of ending inventory?
Residual dividend mode-dividend payout ratio : Residual dividend model Axel Telecommunications has a target capital structure that consists of 70% debt and 30% equity. The company anticipates that its capital budget for the upcoming year will be $3,000,000. If Axel reports net income of $2,000,00..
Transfer selling marketable securities from its portfolio : Barenbaum Industries projects that cash outlays of $4.5 million will occur uniformly Optimal Cash throughout the year. Barenbaum plans to meet its cash requirements by periodically. Transfer selling marketable securities from its portfolio. The firm’..
Can that histogram be approximated by a normal model : The candy company claims that 10% of the M&M's it produces are green. Suppose that the candies are packaged at random in small bags containing about 50 M&M's. A class of elementary school students learning about percents opens several bags, counts th..
Write a statement that interprets the confidence interval : Write a statement that interprets the confidence interval. Based on the preceding result, should pollsters be concerned about results from surveys conducted by telephone?

Reviews

Write a Review

 

Financial Management Questions & Answers

  Explain the difference between the civil suit and criminal

Please explain the difference between the civil suit and criminal suits brought against Ralph Cioffi and Matthew Tannin. What were the charges in each lawsuit and what were the verdicts or settlements. Who were the other bankers charged civil or crim..

  Use the arithmetic average-real risk-free rate

Suppose the real risk-free rate is 3.50%, the average future inflation rate is 2.50%, a maturity premium of 0.20% per year to maturity applies, i.e., MRP = 0.20% (t), where t is the years to maturity. Suppose also that a liquidity premium of 0.50% an..

  Residual distribution model

Plucky Products is planning for $3.3 million in capital expenditures next year. Plucky's target capital structure consists of 35% debt and 65% equity. If net income next year is $2.4 million and Plucky follows a residual distribution policy with all ..

  CAPM and required return

Bradford Manufacturing Company has a beta of 2.2, while Farley Industries has a beta of 0.5. The required return on an index fund that holds the entire stock market is 9.5%. The risk-free rate of interest is 3%. By how much does Bradford's required r..

  Annuity is equal to the present value-retirement account

Suppose you deposit $20,000 at the end of each of the next 30 years into a retirement account. Immediately after your last deposit, you take the entire accumulated value in your account and purchase a 20-year annuity, which will pay you X at the begi..

  Merger valuation-assume that the risk-free rate of interest

Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 3% and the market risk premium is 7%. Harrison estimates that if it acquires Van Buren, the year-end dividend will remain at $2.75 a ..

  Compute the slope of the capital market line

What is the duration of assets that would be necessary to immunize the market value of equity from interest rate changes for this bank's portfolio holding the D1 constant and compute the slope of the Capital Market Line (CML) when the risk-free ra..

  Find the equity beta for this firm for debt–equity ratios

Suppose a firm’s business operations mirror movements in the economy as a whole very closely—that is, the firm’s asset beta is 1. Find the equity beta for this firm for debt–equity ratios of 0, 1.6, 6.2, and 25.

  Needed expansion projects

BDJ Co. wants to issue new 22-year bonds for some much-needed expansion projects. The company currently has 8.7 percent coupon bonds on the market that sell for $1,127, make semi-annual payments, and mature in 22 years.

  What is the reward to risk ratios

Stock Y has a beta of 1.8 and an expected return of 18.3 percent. Stock Z has a beta of 1.0 and an expected return of 11.3 percent. If the risk-free rate is 5.6 percent and the market risk premium is 6.6 percent, the reward-to-risk ratios for stocks ..

  Total annual holding and ordering costs associated

Eastside Auto purchases a component used in the manufacture of automobile generators directly from the supplier. West side’s generator production operation, which is operated at a constant rate, will require 1000 components per month throughout the y..

  Accounting software package

Topic: Comparison of Sage 50 Accounting and at least one other accounting software package.(research paper at least 3 source and 2 pages)

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