Reference no: EM131336754
The Emco Steel Company has experienced a slow (3 percent per year) but steady increase in earnings per share. The firm has consistently paid out an average of 75 percent of each year's earnings as dividends. The stock market evaluates Emco primarily on the basis of its dividend payout because growth prospects are modest.
Emco's management presents a proposal to the board of directors that would require the outlay of $50 million to build a new plant in the rapidly expanding Florida market. The expected annual return on the investment in this plant is estimated to be in excess of 30 percent, more than twice the current company average. To finance this investment, a number of alternatives are being considered. They include the following:
a. Finance the expansion with externally raised equity
b. Finance the expansion with 50 percent externally generated equity and 50 percent internally generated equity. This alternative would necessitate a dividend cut for this year only.
c. Finance the expansion with a mix of debt and equity similar to their current relative proportions in the capital structure. Under this alternative, dividends would not be cut. Rather, any equity needs in excess of that which could be provided internally would be raised through a sale of new common stock.
Evaluate these various financing alternatives with reference to their effects on the dividend policy and common stock values of the company.
Construct a relational database for leslies auto sales
: Vehicle Identification Number, Manufacturer, Model, Year, Sticker Price Leslie' s, including the date of the sale and the negotiated price. Construct a relational database for Leslie's Auto Sales.
|
Electrical or optical transmission systems
: What is the movement of computer information by means of electrical or optical transmission systems?
|
Analyse costs in business organisations contexts
: Managerial Accounting - BLB00045-5 - Analyse costs in business organisations contexts - Apply cost estimation techniques in a range of business situations and Effectively communicate cost and revenue information in a decision making context
|
Forced distribution will increase customer satisfaction
: 1. Do you predict that the forced distribution will increase customer satisfaction? Why or why not? 2. Which clerical workers do you think will most strongly oppose the change? 3. How do you think supervisors will react to the proposed change?
|
Finance the expansion with externally raised equity
: Finance the expansion with 50 percent externally generated equity and 50 percent internally generated equity. This alternative would necessitate a dividend cut for this year only.
|
Description of the neurological disorder
: Post a description of the neurological disorder you selected including types of drugs that would be prescribed to patients to treat associated symptoms
|
Murphy points to the fugitive slave act
: In our reading this week in Chapter 2, Murphy points to the Fugitive Slave Act as an example of a law that is so morally wrong that subjects would be justified in disobeying such law and in fact, it could be said that it would be the duty of citiz..
|
Write a report comparing three auto websites
: Write a report comparing three auto websites. For each auto website include: List their web address, include company background, indentify any social media tools that the site uses.
|
Determine the thickness of the water layer
: The horizontal force that the water applies to the runners is 5 N when the sled's speed is 15 ft/s. The total area of contact between both runners and the water is 74 cm2. Determine the thickness of the water layer under the runners.
|