Calculate the payout and plowback ratios

Assignment Help Finance Basics

Reference no: EM13273088

A company has announced $50,000 in net income after paying taxes of $26,000 and interest of $20,000. It intends to pay $17,000 of net income as dividends. Its assets have averaged $600,000 over the past year, during which its total debt ratio has averaged 40%. Given this information, answer the following about the company's profitability:

a. Calculate the ROA and ROE.
b. Calculate the payout and plowback ratios.
c. What effect will the plowback have on the company's growth in equity?

Reference no: EM13273088

Questions Cloud

Calculate the mass of the string : A tight uniform string with a length of 1.80 m is tied down at both ends and placed under a tension of 100 N. What is the mass of the string

What must the coupon rate be on the bonds : Kiss the Sky Enterprises has bonds on the market making annual payments, with 18 years to maturity, and selling for $780. At this price, the bonds yield 7.3 percent. What must the coupon rate be on the bonds?

What is meant by default risk in bonds : What is meant by "default risk" in bonds, and how do investors respond to it?

Review of stock prices-news and business conditions : Write a review of the attached article. Use finance theory to explain and critique the key points that the authors are trying to communicate. Stock Prices, News, and Business Conditions

Calculate the payout and plowback ratios : Its assets have averaged $600,000 over the past year, during which its total debt ratio has averaged 40%. Given this information, answer the following about the company's profitability.

What os the speed of the brick after the collision : A 50g ball of clay traveling at speed v0 hits and sticks to a 1.0kg block sitting at rest on a frictionless surface. what os the speed of the brick after the collision

What is the annual carrying cost of the t-shirt inventory : The carrying cost is $0.10 per shirt per year. What is the annual carrying cost of the t-shirt inventory (rounded to the nearest dollar)?

Compute how much energy is stored in the capacitor : A parallel-plate capacitor is constructed from two 13cm X 13cm electrodes spaced 0.90mm apart. The capacitor plates are charged to ± 20nC, How much energy is stored in the capacitor

Explain separate a three componentmixture of benzene : Consider a separation train consisting of two distillation columns which are designed to separate a three componentmixture of benzene, toluene, and xylene into three streams, each rich in one of the species asshown below.

User Account

All Pages