Calculate boehms total dividends for 2014

Assignment Help Finance Basics

Reference no: EM13262541

Alternative Dividend Policies

Boehm Corporation has had stable earnings growth of 5% a year for the past 10 years, and in 2013 Boehm paid dividends of $2.6 million on net income of $16.0 million. However, in 2014 earnings are expected to jump to $22.4 million, and Boehm plans to invest $12.8 million in a plant expansion. This one-time unusual earnings growth won't be maintained, though, and after 2014 Boehm will return to its previous 5% earnings growth rate. Its target debt ratio is 35%.

Calculate Boehm's total dividends for 2014 under each of the following policies-

Its 2014 dividend payment is set to force dividends to grow at the long-run growth rate in earnings. Round your answer to the nearest dollar.

It continues the 2013 dividend payout ratio. Round your answer to the nearest dollar.

It uses a pure residual policy with all distributions in the form of dividends (35% of the $12.8 million investment is financed with debt). Round your answer to the nearest dollar.

It employs a regular-dividend-plus-extras policy, with the regular dividend being based on the long-run growth rate and the extra dividend being set according to the residual policy. Round your answer to the nearest dollar.

Reference no: EM13262541

Questions Cloud

What does the market believe will be the stock price : what does the market believe will be the stock's price at the end of 3 years (i.e., what is )? Do not round intermediate steps. Round your answer to the nearest cent.

Explain what is the temperature under standard conditions : If the reaction 2 NO(g) + O2(g) ? 2 NO2(g) is carried out at standard conditions, what is the total pressure. What is the temperature under standard conditions

What is the value per share of your firm stock : what is the value per share of your firm's stock? Round your answer to the nearest cent. Do not round your intermediate computations.

What is a red badge of courage : What is a red badge of courage and a literary device used by Crane involved the descriptive use of sound and silence in the book. What does sound and silence represent? In your opinion, how effective is the contrast?

Calculate boehms total dividends for 2014 : It uses a pure residual policy with all distributions in the form of dividends (35% of the $12.8 million investment is financed with debt). Round your answer to the nearest dollar.

Explain what is the temperature at stp : If the reaction 2 NO(g) + O2(g) ? 2 NO2(g) is carried out at STP, what is the total pressure? What is the temperature at STP

What minimum diameter is required for the wire : A steel wire of length 1.97m with circular cross section must stretch no more than 0.270cm, What minimum diameter dmin is required for the wire

Describe what is the enthalpy for the reaction : Procedure for Using Hess's Law; for Part C, What is the enthalpy for the following reaction

Why would a company prefer cross-sectional research : Why would a company prefer cross-sectional research rather than longitudinal research?

User Account

All Pages