Company options for raising equity needed for capital budget

Assignment Help Financial Management

Reference no: EM131825967

Connor Company is evaluating its dividend policy. Selected data for the company are shown below.

Capital budget $5,000,000

Desired capital structure 30% Debt

70% Equity

Expected net income $3,000,000

Outstanding shares 10,000,000

Last annual dividend per share $0.25

A. If the company follows a residual policy, how much will it pay out in dividends?

B. If the company decides to maintain last year's dividend, how much will it pay out in dividends this year?

C. What are the company's options for raising the equity needed for the capital budget?

D. Should the company follow the residual dividend policy? Why or Why not?

E. Which is better for the stockholder - cash dividends or stock repurchases? Why?

Reference no: EM131825967

Questions Cloud

Exchange rate between the japanese yen and the dollar : The exchange rate between the Japanese yen and the U.S. dollar is 100.25, Does the Japanese exporter or the U.S. importer bear the exchange rate risk? Why?

Study of international business : The study of International Business is fine if you are going to work in a large multinational enterprise, but it has no relevance for individual

Conduct a macro-external environment analysis : Conduct a macro-external environment analysis (PESTEL) and identify trends that are likely to affect the industry in which your chosen company operates.

Regulation of international global labor standards : What is your opinion on the regulation of international global labor standards? Should all countries follow the same standards?

Company options for raising equity needed for capital budget : Connor Company is evaluating its dividend policy. What are the company's options for raising the equity needed for the capital budget?

Current labor policies of the specific developed market : Need a Recommendation for a specific developed market to answer these following questions

Evaluate benefits that sustainability-led innovation offers : Evaluate three benefits that sustainability-led innovation offers to the environment, the company's operations systems change, and to the various stakeholders.

Think about the loss of national sovereignty appears : What do you think about the loss of national sovereignty appears to be an inevitable result of MNC's and IGO's.

Why would an organization want to be effective : 1. Why would an organization want to be effective? 2. How would you describe or define organizational effectiveness?

User Account

All Pages