What is davis dividend payout ratio

Assignment Help Financial Accounting
Reference no: EM132846276

Questions -

Q1. A firm has a capital budget of $850,000, it wants to maintain a target capital structure of 35% debt and 65% equity, and it also wants to pay a dividend of $400,000. If the company follows a residual dividend policy, how much net income must it earn to meet its capital budgeting requirements and pay the dividend, all while keeping its capital structure?

$952,500

$1,080,300

$1,236,500

$1,356,300

Q2. A company expects to have net income of $3,100,000 during the next year. Its target capital structure is 30% debt and 70% equity. The company has determined that the optimal capital budget for the coming year is $3,000,000. If Davis follows a residual distribution policy (with all distributions in the form of dividends) to determine the coming year's dividend, then what is Davis's dividend payout ratio?

50.0%

32.3%

26.7%

16.0%

Reference no: EM132846276

Questions Cloud

What traditional and modern maps that are very valuable : What traditional and modern MAPs that are very valuable but yet being underutilized by SMEs? Discuss constraints of SMEs that contribute to the underutilization
Prepare the journal entry for issuance of the bonds on june : On June 1, 2018, Eiffel decided to retire 20% of the bonds. Prepare the journal entry for the issuance of the bonds on June 1, 2016
Should the moss hire an additional employee : As Miranda Hobson, prepare a letter to the Moss advising them on their laundry needs. What is your recommendation and why?
What is the amount of outstanding checks on July : Check for purchase of supplies was drawn for P300,000 but was recorded as P200,000. What is the amount of outstanding checks on July
What is davis dividend payout ratio : If Davis follows a residual distribution policy to determine the coming year's dividend, then what is Davis's dividend payout ratio
Discuss the importance of top management commitment : How is a project different from what most people do in their day-to-day jobs? Discuss the importance of top management commitment.
Perform an experiment : Perform an experiment - Make note of anything that was done which is different from what is stated in the lab instruction sheet
What is the best number of clusters and why : Select all features in the dataset then apply a K-means clustering algorithm with a different number of clusters. Describe the dataset; its main features
What is the change in operating income for the year : What is the change in operating income for the year if $6.50 is the new selling price and costs remain the same but sales increase to 500,000

Reviews

Write a Review

Financial Accounting Questions & Answers

  How do record a cash collection

Determine and How do you record a cash collection if the customer whose account was written off unexpectedly pays the full amount?

  Provide specific examples of accounting information

provide specific examples of accounting information that might be useful for assessing each factor noted above. Be sure to explain specifically how each example might be used in assessing the elements of of a firm's strategy.

  Estimate what is the price of the stock today

You are considering buying a stock,The dividend is expected to grow at 5.6% per year forever. The interest rate is 10.6%. what is the price of this stock today?

  An investment offers 8800 per year for 14 years with the

an investment offers 8800 per year for 14 years with the first payment occurring 1 year from now. assume the required

  Prepare a trial balance

Prepare a trial balance for the following data

  What will the bonds sell for today

The company has estimated a growth rate of 8% for the next several years. If the appropriate discount rate is 14%, what is the current price of this share?

  Pass the necessary entries on june

On 1 July 2016 Liala Ltd sold an item of plant, Pass the necessary entries on 30 June 2017 and 30 June 2018 to eliminate the intra-group transfer of equipment.

  Compute cogs and and income statement

How do prepare a cogm, compute cogs and and income statement. raw materials inventory, begining 30.Finished goods inventory beginning 150

  State the main standard applicable to the situation

Finance charges are at the rate of 10% per annum on the balance of the outstanding obligation. State the main standard applicable to the situation

  Merchandizing company account for the suits that amy returns

Amy Martin is a student who plans to attend approximately four professional events a year at her college. Each event necessitates financial outlays of $100-$200 for a new suit and accessories. How does the merchandizing company account for the suits ..

  Make the accounting equation

Prepare the accounting equation with the help of transactions Started Business with cash -300,000 AED, Purchased goods for credit- 50,000 AED.

  What is the formula to determine the effective interest rate

An important source of temporary cash is trade credit, which does not actually bring in cash, but instead slows its outflow. Vendors often provide discounts for early payment. What is the formula to determine the effective interest rate if the dis..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd