Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
In 2008 the Keenan Company paid dividends $3.6 million on net income of $10.8 million. The year was normal, and for the past 10 years, earnings have grown at a constant rate of 10%. However, in 2009, earnings are expected to jump to $14.4 million, and the firm expects to have profitable investments opportunities of $8.4 million. It is predictable that Keenan will not be able to maintain the 2009 level of earnings growth - the high 2009 earning level is attributable to an exceptionally profitable new product line introduced that year- and the company will return to its previous 10% growth rate. Keenan's target debt ratio is 40%.
a. calculate Keenan's total dividends for 2009 if it follows each of the following policies:
1. Its 2009 dividend payment is set to force dividends to grow at the long-run growth rate in earnings.2. It continues the 2008 dividend payout ratio.3. It uses a pure residual policy with all distributions in the form of dividends (40% of the $8.4 million investment is financed with debt).4. 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.
b. Which of the preceding policies would you recommend? Restrict your choices to the ones listed but justify your answer.
c. Does a 2009 dividend of $9 million seem reasonable in view of your answers to a and b? If not, should the dividends be higher or lower
Calculate the present value of $90,000 to be received 14 years from now if the decision makers opportunity cost 10 percent. Find out the present value at 9 percent of each of following five cash inflow streams. Suppose that cash inflows take place ..
Compare the results from the traditional method, the P-value method, and the confidence interval method. Do they all lead to the same conclusion?
you are considering the acquisition of an office building. the purchase price is 775000. seventy-five percent of the
ABC Corp believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock?
if during a period a company paid a dividend of 5 and the price per share was 60 at the beginning of the period and 75
You will need to understand the cost approach to value estimation.
The Green Giant Has a 5 perecnt profit margin and a 40 percent dividend payout ration the total assest turnover is 1.40 and the equilty militiplier is 1.50. What is the sustainable rate of growth?
If you ignore taxes and transaction costs, a stock repurchase will?
Given the current tax code, financing decisions don't affect the total size of cash flow available to all suppliers of capital; they just affect who receive the flows. Check whether true or false.
mullineaux corporation has a target capital structure of 50 percent common stock 5 percent preferred stock and 45
Company X information for Diluted Shares calculations for period 201X: Earnings for Year 201X - $20 million Average Basic shares outstanding for Company X in 201X - 10 million Average Stock Price for year 201X - $6.00 Warrants to purchase common s..
Watch this video and write a 2 page paper on the bullet points below. : https://www.youtube.com/watch?v=vYf6gn_x-ZkThe objective is to provide your own unique insights. Please do not summarize the video in your essay.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd