Reference no: EM132032327
Question: Phillips Rock and Mud is trying to determine the maximum amount of cash dividends it can pay this year. Assume its balance sheet is as follows: AssetsCash$ 386,000Accounts receivable836,000Fixed assets 1,048,000 Total assets$2,270,000Liabilities and Stockholders' EquityAccounts payable$ 459,000Long term payable371,000Common stock (295,000 shares at $1 par)295,000Retained earnings 1,145,000 Total liabilities and stockholders' equity$2,270,000
a. From a legal perspective, what is the maximum amount of dividends per share the firm could pay?
b. In terms of cash availability, what is the maximum amount of dividends per share the firm could pay?
c. Assume the firm earned an 18 percent return on stockholders' equity last year. If the board wishes to pay out 50 percent of earnings in the form of dividends, how much will dividends per share be? (Round to two places to the right of the decimal point.) (Block 598) Block, Stanley, Geoffrey Hirt, Bartley Danielsen. Foundations of Financial Management, 16th Edition. McGraw-Hill Learning Solutions, 01/2016. VitalBook file. The citation provided is a guideline. Please check each citation for accuracy before use.
|
What projects would you recommend
: The reason of the low probability of FDA approval for Fosbuvir is that another company, Pharmaset, Inc., is working on a similar drug, called FosbuvirP.
|
|
Compute the value of increasing annuity
: Peter buys a 5-year increasing annuity to X. He will receive 3 at the end of the first month, 6 at the end of the second month, and for each month thereafter.
|
|
What is the addition to retained earnings
: Pharrell, Inc., has sales of $590,000, costs of $268,000, depreciation expense of $68,500, interest expense of $35,500, and a tax rate of 40 percent.
|
|
Can the employee sue third party contractors
: If you were the Philadelphia Phillies and you wanted to hire two experts for a two year period to enhance activities that are environmentally friendly.
|
|
What is the maximum amount of dividends per share
: Phillips Rock and Mud is trying to determine the maximum amount of cash dividends it can pay this year. Assume its balance sheet is as follows.
|
|
Determine the engineering economy symbols
: A pharmaceutic engineer started a small-scale drug processing company for the production of Aloe Vera extract with an initial investment of $750,000.
|
|
Should philip hardware accept or reject superstore project
: Philip's Hardware is a retail chain of specialty hardware stores. The firm has 24,000 shares of stock outstanding that are currently valued at $51 a share.
|
|
How much will you pay for the contract today
: Peter Lynchpin wants to sell you an investment contract that pays equal $12, 600 amounts at the end of each of the next 18 years.
|
|
What is the smallest possible effective rate of interest
: A perpetuity pays $680 annually. At the time of the second payment, the value of the entire perpetuity (including the first payment) is $6700.
|