Operates in mature industry as cash cow

Assignment Help Financial Management

Reference no: EM131186462

Tabula, Inc. operates in a mature industry as a “cash cow” and thus pays out all of its earnings as dividends. But it has recently developed a new technology that could provide good growth potential, allowing the firm to earn an 8% return on retained earnings in future years. The new technology, however, will require investment. To obtain investment cash, Tabula is considering reducing its dividend payout ratio immediately from 100% to 40%. Current (t=0) earnings and dividends are $285,000. Investors are expecting a return of 10% overall return. In light of this, what is Tabula’s NPVGO?

Reference no: EM131186462

Questions Cloud

Write an essay about the cultural aspects : Write an essay about the cultural aspects that you found in Guests of the Sheik, or A Wife for my Son, or Men in the Sun and Other Palestinian Stories.

Determine the mass percent nacl in the solution : a student prepared a solution of sodium chloride (NaCl) in distilled water by disolving 1.05g of NaCl in about 50mL of water. The mass of the final solution is 51.98g. determine the mass percent NaCl in the solution

Find the gross profit ratio from the details : Find the gross profit ratio from the details below: Opening Stock $ 5000Purchases $ 55000 Gross Profit $ 6000 Closing Stock $ 7000

Make dividend payment that provides a dividend yield : Tetrad, Inc. is scheduled to make a dividend payment that provides a dividend yield of 6.5%, and this dividend amount is expected to grow in perpetuity at 3% annually. If the stock is selling for $66.00/share, what return do investors anticipate?

Operates in mature industry as cash cow : Tabula, Inc. operates in a mature industry as a “cash cow” and thus pays out all of its earnings as dividends. But it has recently developed a new technology that could provide good growth potential, allowing the firm to earn an 8% return on retained..

Internet search engine : Use the key word ECONOMIC NEWS in an Internet search engine (Google, Bing etc.) to locate online news sources such as CNN News, the NYTimes, Chicago Tribune, Forbes, US News and World Report, or any of the various other nationally recognized news ..

How does the sow affect administration of the contract : Why is it essential to differentiate between the primary objective and subordinate objectives while developing the SOW? How does the SOW affect administration of the contract? Describe the balancing act required when developing the SOW. Give two exam..

Holdings and reinvest the proceeds elsewhere : You own the stock of SageTech and its current price is $55.00/share. It pays no dividend today. Based on your own research, you expect SageTech to pay its first dividend of $3.80/share at the end of Years 1 and 2 (12 and 24 months from now). In ligh..

How many calories can be obtained from one average banana : how many calories can be obtained from one average banana

User Account

All Pages