How large should dividend payout ratio be next year

Assignment Help Financial Management

Reference no: EM131011569

The Wei Corporation expects next year's net income to be $20 million. The firm's debt ratio is currently 40%. Wei has $15 million of profitable investment opportunities, and it wishes to maintain its existing debt ratio. According to the residual distribution model (assuming all payments are in the form of dividends), how large should Wei's dividend payout ratio be next year? Round your answer to two decimal places.

Reference no: EM131011569

Questions Cloud

How much will he be paid if his home is totally destroyed : Jerry Carter's home is currently valued, on a cost basis, at $315,000. When he last checked his policy, his home was insured for $235 000, and he did not have an inflation guard If he has a s25,500 claim due to a kitchen fire, how much will his homeo..

Find some conditional probabilities : Choose a point at random in the square with sides 0 ≤ x ≤ 1 and 0 ≤ y ≤ 1. This means that the probability that the point falls in any region within the square is the area of that region.

Personal property coverage : Keith and Dena Diem have personal property coverage with a $250 limit on rency, a $1,000 limit on jewelry, and a $2,500 limit on gold, silver, and pewter The do not have a personal property floater. If $500 in cash, $2,400 of jewelry, and $1,5 of pew..

How does film editing contribute to its success or failure : How does a film's editing contribute to its success or failure? What is the relationship between a finished film and the tempothe editing creates? How does editing create a film's rhythm

How large should dividend payout ratio be next year : The Wei Corporation expects next year's net income to be $20 million. The firm's debt ratio is currently 40%. Wei has $15 million of profitable investment opportunities, and it wishes to maintain its existing debt ratio. According to the residual dis..

Terms of credit if the invoice is paid : An mace of$1,000.1, merchandise purchased is showing, 3/15, n/30 as terms of credit if the invoice is paid on or before te fifteenth day, the amount be paid is A. $1.033 B. $1.000 C. $970 D. $1.030

What is the present value of all three future benefits : Del Monty will receive the following payments at the end of the next three years: $19,000, $22,000, and $24,000. Then, from the end of the 4th through the end of the 10th year, he will receive an annuity of $25,000 per year. At a discount rate of 16 ..

Marginal corporate income tax-what costs of preferred stock : Our company has issued $2,000 bonds with an annual coupon rate of 4%. If the marginal corporate income tax is 15%, what is our cost of debt? Our company has also issued $5,000 preferred stock. The face value is $100, and coupon rate is 6%, and market..

Explore the roles of faith : Both Le Guin's "The Ones Who Walk Away From Omelas" and Marquez's "A Very Old Man With Enormous Wings" explore the roles of faith, martyrdom, and tradition

User Account

All Pages