Calculate the amount of net income available for the company

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Question - You are working for an imports-exports company. In the current financial year, your company has a net income of $851,000 and plans to use a part of it as retained earnings for a new project which will cost $500,000 next year. The company's stock is currently listed and actively traded on ASX.

Required -

a) Calculate the amount of net income available for the company to pay dividends to current shareholders if it maintains a capital structure of 46% in debt funding and 54% in equity funding, assuming residual dividend theory applies.

b) Your company is going to pay an annual dividend of $5 per share and extra dividend of $2 per share in 4 weeks. The standard process of settlement in ASX is T+2. If tomorrow is the ex-dividend date, when is the record date for dividend payment? Calculate the ex-dividend price if today's market price is $43.5, given the dividend tax rate is 13%.

c) Your company needs to make a payment of AUD 245,000 to a partner in Tokyo. If the direct quote of Japanese Yen in Sydney is 0.004782, how much Japanese Yen the partner in Tokyo will receive?

Reference no: EM133018316

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