Reference no: EM131561358
DuPont has a capital budget of $900,000, it wants to maintain a target capital structure of 35% debt and 65% equity, and it also wants to pay a dividend of $325,000. If DuPont follows a residual dividend policy, how much net income must it earn to meet its capital budgeting requirements and pay the dividend, all while keeping its capital structure in balance?
$940,000
$910,000
$970,000
$1,010,000
Which of the following statements is NOT CORRECT?
Bank loans to businesses are frequently made as 90-day notes which are often rolled over, or renewed, rather than repaid when they mature. However, if the borrower's financial situation deteriorates, then the bank may refuse to roll over the loan.
If one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but it does not represent a real financial cost to your firm as long as the customer periodically pays off its entire balance.
With a revolving credit agreement, the firm must generally pay a fee on the unused balance of the committed funds to compensate the bank for the commitment to extend those funds.
Accruals arise automatically from a firm's operations and are "free" capital in the sense that no explicit interest must normally be paid on accrued liabilities.
Woodley Furniture Company recorded $20 million of sales in its most recently completed year. All sales were on credit that called for payment within 45 days. Woodley's account receivables over the same period of time averaged $5 million. Calculate Woodley's days sales outstanding or DSO. Note: Woodley uses a 365 day year.
60.75 days.
45.0 days.
75.5 days.
91.25 days.
Evaluating maria sepulveda retirement prospects
: Evaluating Maria Sepulveda Retirement Prospects. Maria Sepulveda is 57 years old. Never remarried, she has worked full-time since her husband died 13 years ago
|
Weighted average of implied by two outstanding debt issues
: Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues.
|
Networking capital funding need
: JohnBoy industries has a cash balanced of $52,000 accounts payable of $132,000, How much net working capital does the firm need to fund?
|
What is present discounted value of each investment stream
: What is the Present Discounted Value of each investment stream?
|
Capital budgeting requirements and pay the dividend
: how much net income must it earn to meet its capital budgeting requirements and pay the dividend, all while keeping its capital structure in balance?
|
Issues protective covenants in loan contract
: If a firm issues debt but issues protective covenants in the loan contract, the debt will probably be issued at a _______ interest rate than similar debt.
|
What is the value of the account and present worth
: what is the value of the account at the end of year 20 in year-0 dollars? If the time value of money is 4%, what is the present worth?
|
How much will company receive when bonds are first sold
: Investors ROR is 8% for the bonds, how much will company receive (ignoring issuance cost) when bonds are first sold?
|
Eliminated the need for the money markets
: Explain why banks, which would seem to have a comparative advantage in gathering information, have not eliminated the need for the money markets.
|