Capital budget be before common stock

Assignment Help Financial Management
Reference no: EM13976582

JP company is financed 75% by equity and 25% by debt. if the firm expect to earn 30 million in net income next year and retain 40% of it, how large can the capital budget be before common stock must be sold ? 15.5 million 7.5 million 16.0 million 12.0 million

Reference no: EM13976582

Questions Cloud

The greater marginal tax rate faced by the now larger firm : Which of the following differentiates the cost of retained earnings from the cost of newly issued common stock? The larger dividends paid to the new common stockholders The flotation costs incurred when issuing new securities the cost of the preempti..
Determine the value of the bond : (Bond valuation) Fingen’s 15-year, $1,000 par value bonds pay 11 percent interest annually. The market price of the bonds is $1,050 and the markets required yield to maturity on a comparable-risk bond is 12 percent. Compute the bonds expected rate of..
Research paper related to human services profession topic : Choose a topic for you research paper related to human services profession. provide a 250 -300 words on why you chose your topic
What is the stock price for each of the stocks : Consider the following three stocks: a. Stock A is expected to provide a dividend of $11.90 a share forever. b. Stock B is expected to pay a dividend of $6.90 next year. Thereafter, dividend growth is expected to be 2% a year forever. what is the sto..
Capital budget be before common stock : JP company is financed 75% by equity and 25% by debt. if the firm expect to earn 30 million in net income next year and retain 40% of it, how large can the capital budget be before common stock must be sold ? 15.5 million 7.5 million 16.0 million 12...
Describe trends or changes in those issues you have chosen : Describe trends or changes in those issues you have chosen from the data. Be sure to include the most recent data , preferably 2014 data, in your report. See the section on "presenting the analysis" below for more specific instructions
What is the market capitalization rate : Company Y does not plow back any earnings and is expected to produce a level dividend stream of $6.20 a share. If the current stock price is $41.20, what is the market capitalization rate?
Compare internal rate of return and net present value : Compare and contrast the Internal Rate of Return (IRR), the Net Present Value (NPV) and Payback approaches to capital rationing. Which do you think is better? Why?
What damages does defendant owe the plaintiff : Sasha is bartending at The Right Round, a nearby pub, because her new song isn’t selling very well. She sees Joe-Lo, a regular customer at The Right Round, is clearly intoxicated. He asks her for one more round of drinks before he leaves. Did defenda..

Reviews

Write a Review

Financial Management Questions & Answers

  The break-even point for buffalo bobs wild wings

Buffalo Bob’s Wild Wings is a restaurant that sells only chicken wings. The restaurant has fixed costs per year of $200,000 and each wing (regardless of dressing) sells for $0.50 and costs $0.25 per. The profit/loss of the firm at 1,000,000 wings sol..

  What should salem do

The budget rate, the lowest acceptable dollar per pound exchange rate, was therefore established at $1.5 per British pound. Any exchange rate below would result in Dayton actually losing money on the transaction.

  Examine the functions and operations of investment banks

Examine the functions and operations of investment banks. a) Describe how investment bank services differ from commercial bank services. b) Why do investment banks sometimes form international syndicates? c) What do investments banks “sell high globa..

  Earnings before interest and taxes and net income increase

You have developed the following pro forma income statement for your corporation.(Sales 45764000) (variable costs 2285400) a. If sales should increase by 30 percent. by what percent would earnings before interest and taxes and net income increase?

  Determine the firms current earnings per share

Security Data Company has outstanding 50,000 shares of common stock currently selling at $40 per share. The firm most recently had earnings available for common stockholders of $120,000, but it has decided to retain these funds and is considering eit..

  What will the present value of his portfolio

Elliot makes $250,000 a year and pays 30% taxes on $150,000 and 35% on his remaining salary. His expenses are $110,000 (per year). He wants to invest a fixed amount EVERY day into an investment fund for 5 years and he hopes to get a 12% return. What ..

  Best value outlet recently announced-intends to pay dividens

Best Value Outlet recently announced that it intends to pay dividends of $0.40, $0.60, $0.75, and $1.00 per share over the next four years, respectively. After that, the plan is to increase the dividend by 3.5 percent annually. What is the current va..

  Bonds outstanding that are selling at par value

Jack's Construction Co. has 100,000 bonds outstanding that are selling at par value. The bonds yield 8.7 percent. The company also has 3.2 million shares of common stock outstanding. The stock has a beta of 1.3 and sells for $20 a share. The U.S. Tre..

  WACC and Percentage of Debt Financing

Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at rd = 9%, and its common stock currently pays a $3.25 dividend per share (D0 = $3.25). The stock's price is currently $21.75, its dividend is expected t..

  What is the level of required new funds

BHS Inc. determines that sales will rise from $510,000 to $680,000 next year. Current assets are 60% of sales and current liabilities are 40% of sales. BHS is not operating at capacity. BHS has an 11.5 % profit margin and a 40% dividend payout ratio...

  An increase in firms average collection period

An increase in a firm's average collection period (average accounts receivable period) generally indicates that:

  A variety of financial ratios and measures

A variety of financial ratios and measures are provided about one of the auto companies and its stock. These are incomplete, however, so some additional information will have to be computed.

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd