Residual dividend model

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1. Randy Corporation has a capital budget of 249.0 and and a Net Income of 10.0. If Randy's target equity fraction is 0.1, what should Randy's dividend be under the residual dividend model?

2. Due to a declining stock price and the possibility of being delisted from an exchange, Hubbell corporation undergoes a reverse 6 to 1 stock split. If Hubbell initially has 210 shares, how many shares does Hubbell have now?

3. Spraggins Inc. has a new capital budget for next year of 1,329,000 and has a target debt fraction of 0.40. If the firm following the residual dividend policy and wants to retain its target capital structure, what must its retained earning be next year?

Reference no: EM133060147

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