Discuss firm could acieve without triggering security issue

Assignment Help Accounting Basics

Reference no: EM132452834

Dividend policy) A firm has 20 million common shares outstanding. It currently pays out $1.50 per share year in cash dividends on its common stock. Historically, its payout ratio has ranged from 30% to 35%. Over the next five years it expects the earnings and discretionary cash flow shown below in millions.

Question 1: A.over the five year period, what is the maxium overall payout ratio the firm could acieve without triggering a securities issue?

Question 2: B. Recommend a reasonable dividend policy for paying out discretionary cash flow in years 1 through 5.

1 2 3 4 5 Thereafter

Earnings 100 125 150 120 140 150+ per year

Discrecreary cash flow 50 70 60 20 15 50+per year

Reference no: EM132452834

Questions Cloud

What is the projects net present value : What is the project's net present value (NPV)? What is the IRR? Should the project be accepted? Why or why not? What is the net investment/initial outlay

Create a powerpoint presentation on the topic of scholarly : Create a PowerPoint presentation on the topic of scholarly writing. Be sure to use the following order of information within your presentation:

Assuming monetary benefits of an information system : Calculate the overall return on investment of the project and then present a break-even analysis. At what point does break-even occur?

Find the value of the call options held by Johnson Ltd : Johnson buys 8,500 BHP call options for $4.20 each. On 30 June 20X7, find the value of the call options held by Johnson Ltd

Discuss firm could acieve without triggering security issue : over the five year period, what is the maxium overall payout ratio the firm could acieve without triggering a securities issue?Recommend a reasonable dividend

Find the value of the equity conversion option : On 1 July 2013, comparable debt without the conversion option yields 10% per annum. Find the value of the equity conversion option on 1 July 2013

What the liability component of the convertible note : If an entity issued a convertible note at a price of $40.00. What would be the liability component of the convertible note

What different frameworks and standards available to danone : If you had to develop integrated KPIs for any of Danone's capitals, which one would you select? Why? What do you think about the notion of capitals?

Discuss the characteristics of the conflict strategies : Discuss the characteristics of the following conflict strategies.

User Account

All Pages