FIN – 516 – WEEK 2 HOMEWORK ANSWER KEY - REVISED PROBLEM BASED ON CHAPTER 15 – WACC & THE HAMADA FORMULA Bickley’s Unlevered Beta: bu = b / (1+(1-T) ( D/S) = 1.3/( 1+(1-.40)(30/70) = 1.3 / (1+(.60) (.4286)) = 1.03 Bickley’s New Levered Beta: bL = bu X (1+(1-.40) ( 15/85) = 1.03 X (1 + (.60)(0.1765) = 1.14 Bickley’s WACC with the 30/70 Capital Structure: Cost of Equity: ke = 3.5% +(1.3 X 7.5) = 13.25% WACC = [7.5% X (1 - .40) X 30%] + [13.25% X 70%] = 1.35% + 9.28% = 10
Words: 274 - Pages: 2
Claudia Gaeta FIN 516- Week 4 homework Chapter 20 – Problem 20 – 1 Profit or Loss on New Stock Issue Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent offering of Beedles Inc., the terms were as follows: Price to public | $5 per share | Number of shares | 3 million | Proceeds to Beedles | $14,000,000 | The out-of-pocket expenses incurred by Security Brokers in the design and distribution of the issue were $300,000. What profit or loss would
Words: 478 - Pages: 2
FIN-516 – WEEK 3 HOMEWORK ANSWER KEY OPTION PROBLEM NO. 1 Exercise Value: Current Stock Price – Strike Price Exercise Value: $36 - $30 = $6 Time Value = Option Price – Exercise Value Time Value = $9 - $ 6 = $3 OPTION PROBLEM NO. 2 Time Value = Market Price of the Option – Exercise Value $7 = V - $23 V = $30 Market Price Exercise Value = Po – Strike Price $23 = Po - $21 Po = $43 Price of the Underlying Stock PROBLEM 15 - 4 S = (1 – wd) (Vop) = (1 – 0.4)($500)
Words: 303 - Pages: 2
FIN 534 Homework Week 1 1. Which of the following statements is CORRECT? a. One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability. b. It is generally easier to transfer one’s ownership interest in a partnership than in a corporation. c. One of the advantages of the corporate form of organization is that it avoids double taxation. d. One of the advantages of a corporation from a social standpoint is that every stockholder has equal voting
Words: 890 - Pages: 4
gaming applications. Initially, the founder invested $800,000 and received 8 million shares of stock. Starware now needs to raise a second round of capital, and it has identified an interested venture capitalist. This venture capitalist will invest $1 million and wants to own 20% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 20% of the company? What is the implied price per share of this funding round? b. What will the value
Words: 490 - Pages: 2
FIN 550 Homework Problems Week 1-10 Follow www.hwmojo.com link below to purchase solution http://www.hwmojo.com/products/fin550-homework-problems We have all assignments, quizzes, exams, homework problems and discussion for FIN 550. Email us support@hwmojo.com FIN 550 Corporate Investment Analysis Week 1-10 Homework Problems Solved FIN 550 Week 1 •Homework o Chapter 1: Problems 5(a-d), 7, 9, and 12 o Chapter 2: Problems 4(a-b), 5(a-b), and 6(a-b) FIN 550 Week
Words: 365 - Pages: 2
A graded original plagrism free answer can be downloaded from here http://www.homeworkmarket.com/content/fin-516-week-4-homework FIN 516 WEEK 4 HOMEWORK FIN 516 Week 4 Homework Problem 23-3 on Implied Price of Funding based on Chapter 23 Starware Software was founded last year to develop software for gaming applications. Initially, the founder invested $800,000 and received 8 million shares of stock. Starware now needs to raise a second round of capital, and it has identified an interested
Words: 561 - Pages: 3
FIN 550 FIN550 week 1 to week 11 Complete Course Click below link for Answer visit www.workbank247.com http://workbank247.com/q/fin-550-week-1-to-week-11-complete-course-fin550-w/9896 http://workbank247.com/q/fin-550-week-1-to-week-11-complete-course-fin550-w/9896 FIN 550 Week 1 Discussion "Investment Performance and Decisions" Please respond to the following: * From the e-Activity, predict the performance of the DOW for the next two years. Provide support for your prediction. * Analyze the
Words: 3754 - Pages: 16
FIN 534 Week 2 Homework Set 1 http://homeworklance.com/downloads/fin-534-week-2-homework-set-1/ FIN 534 Week 2 Homework Set 1 Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homework assignment is worth 100 points. Use the following information for Questions 1 through 8: Assume that you recently
Words: 314 - Pages: 2
FIN 534 Week 2 Homework Set 1 http://homeworklance.com/downloads/fin-534-week-2-homework-set-1/ FIN 534 Week 2 Homework Set 1 Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homework assignment is worth 100 points. Use the following information for Questions 1 through 8: Assume that you recently
Words: 314 - Pages: 2
FIN 515 WEEK 1 HOMEWORK ASSIGNMENT To purchase this visit following link: http://www.activitymode.com/product/fin-515-week-1-homework-assignment/ Contact us at: SUPPORT@ACTIVITYMODE.COM FIN 515 WEEK 1 HOMEWORK ASSIGNMENT FIN 515 Week 1 Homework assignment Week 1 Homework Assignment Complete the following graded homework assignment in a Word document named FIN515_Homework1_yourname.” Show the details of your calculations/work in your answer to the problems. • Mini Case (p. 45) • Problems
Words: 656 - Pages: 3
FIN 515 Week 1 Homework assignment Purchase here http://devrycourse.com/fin-515-week-1-homework-assignment Product Description Week 1 Homework Assignment Complete the following graded homework assignment in a Word document named “FIN515_Homework1_yourname." Show the details of your calculations/work in your answer to the problems. • Mini Case (p. 45) • Problems (p. 79) o 2-6 Statement of Retained Earnings o 2-7 Corporate Tax Liability (calculate tax liability and AT income) o
Words: 665 - Pages: 3
FIN 515 Week 1 Problem Set Answers http://homeworklance.com/downloads/fin-515-week-1-problem-set-answers/ Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_1_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 1 (page 19) 1. What is the most important difference between a corporation and all other organizational forms? 2
Words: 470 - Pages: 2
FIN 100 Week 5 Homework Answers To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-100-week-5-homework-answers/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 100 Week 5 Homework Answers 1. Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity if your first $5,000 is invested at the end of
Words: 345 - Pages: 2
FIN 516 Week 1 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-1-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 1 Homework Problem Problem 17-7 on Ex-dividend Price Based on Chapter 17 Payout Policy Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding with a current market
Words: 277 - Pages: 2
FIN 516 Week 2 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-2-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 2 Homework Problem Problem 14-11 Based on Chapter 14: WACC and Modigiani & Miller Extension Models With Growth Assumptions Consider the entrepreneur described in Section 14.1 (and referenced in Tables 14.1–14.3)
Words: 399 - Pages: 2
FIN 516 Week 3 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-3-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 3 Homework Problem Problem 20-6 on Call Options Based on Chapter 20 (Excel file included) You own a call option on Intuit stock with a strike price of $40. The option will expire in exactly 3 months’ time. a) If
Words: 623 - Pages: 3
FIN 516 Week 4 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-4-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 4 Homework Problem Problem 23-3 on Implied Price of Funding Based on Chapter 23 Starware Software was founded last year to develop software for gaming applications. Initially, the founder invested $800,000 and received
Words: 537 - Pages: 3
FIN 516 Week 5 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-5-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 5 Homework Problem Problem 25-6 on Purchase Versus Lease Based on Chapter 25 Craxton Engineering will either purchase or lease a new $756,000 fabricator. If purchased, the fabricator will be depreciated on a straight-line
Words: 303 - Pages: 2
FIN 516 Week 6 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-6-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 6 Homework Problem Problem 28-9 on Acquisition Analysis Based on Chapter 28 Mergers and Acquisitions (Excel file included) Your company has earnings per share of $4. It has 1 million shares outstanding, each of
Words: 696 - Pages: 3
FIN 516 Week 7 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-7-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 7 Homework Problem Problem 31-1 on Exchange Rates Based on Chapter 31 International Corporate Finance (Excel file included) You are a U.S. investor who is trying to calculate the present value of a €5 million cash
Words: 648 - Pages: 3
FIN 100 Week 5 Homework Answers To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-100-week-5-homework-answers/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 100 Week 5 Homework Answers 1. Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity if your first $5,000 is invested at the end of
Words: 345 - Pages: 2
FIN 516 Week 1 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-1-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 1 Homework Problem Problem 17-7 on Ex-dividend Price Based on Chapter 17 Payout Policy Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding with a current market
Words: 277 - Pages: 2
FIN 516 Week 2 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-2-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 2 Homework Problem Problem 14-11 Based on Chapter 14: WACC and Modigiani & Miller Extension Models With Growth Assumptions Consider the entrepreneur described in Section 14.1 (and referenced in Tables 14.1–14.3)
Words: 399 - Pages: 2
FIN 516 Week 3 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-3-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 3 Homework Problem Problem 20-6 on Call Options Based on Chapter 20 (Excel file included) You own a call option on Intuit stock with a strike price of $40. The option will expire in exactly 3 months’ time. a) If
Words: 623 - Pages: 3
FIN 516 Week 4 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-4-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 4 Homework Problem Problem 23-3 on Implied Price of Funding Based on Chapter 23 Starware Software was founded last year to develop software for gaming applications. Initially, the founder invested $800,000 and received
Words: 537 - Pages: 3
FIN 516 Week 6 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-6-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 6 Homework Problem Problem 28-9 on Acquisition Analysis Based on Chapter 28 Mergers and Acquisitions (Excel file included) Your company has earnings per share of $4. It has 1 million shares outstanding, each of
Words: 696 - Pages: 3
FIN 516 Week 7 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-7-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 7 Homework Problem Problem 31-1 on Exchange Rates Based on Chapter 31 International Corporate Finance (Excel file included) You are a U.S. investor who is trying to calculate the present value of a €5 million cash
Words: 648 - Pages: 3
FIN 516 Week 2 Homework To Buy This material Click below link http://www.uoptutors.com/fin-516-new/fin-516-week-2-homework Problem 14-11 Based on Chapter 14: WACC and Modigiani & Miller Extension Models With Growth Assumptions Consider the entrepreneur described in Section 14.1 (and referenced in Tables 14.1–14.3). Suppose she funds the project by borrowing $750 rather than $500. a. According to MM Proposition I, what is the value of the equity? What are its cash flows if the economy is
Words: 385 - Pages: 2
FIN 516 Week 3 Homework To Buy This material Click below link http://www.uoptutors.com/fin-516-new/fin-516-week-3-homework Problem 20-6 on Call Options Based on Chapter 20 You own a call option on Intuit stock with a strike price of $40. The option will expire in exactly 3 months’ time. a) If the stock is trading at $55 in 3 months, what will be the payoff of the call? b) If the stock is trading at $35 in 3 months, what will be the payoff of the call? c) Draw a payoff diagram showing the value
Words: 598 - Pages: 3
FIN 516 Week 4 Homework To Buy This material Click below link http://www.uoptutors.com/fin-516-new/fin-516-week-4-homework Problem 23-3 on Implied Price of Funding Based on Chapter 23 Starware Software was founded last year to develop software for gaming applications. Initially, the founder invested $800,000 and received 8 million shares of stock. Starware now needs to raise a second round of capital, and it has identified an interested venture capitalist. This venture capitalist will invest
Words: 518 - Pages: 3
FIN 516 Week 5 Homework To Buy This material Click below link http://www.uoptutors.com/fin-516-new/fin-516-week-5-homework Problem 25-6 on Purchase Versus Lease Based on Chapter 25 Craxton Engineering will either purchase or lease a new $756,000 fabricator. If purchased, the fabricator will be depreciated on a straight-line basis over 7 years. Craxton can lease the fabricator for $130,000 per year for 7 years. Craxton’s tax rate is 35%. (Assume the fabricator has no residual value at the end
Words: 287 - Pages: 2
FIN 516 Week 6 Homework To Buy This material Click below link http://www.uoptutors.com/fin-516-new/fin-516-week-6-homework Problem 28-9 on Acquisition Analysis Based on Chapter 28 Mergers and Acquisitions Your company has earnings per share of $4. It has 1 million shares outstanding, each of which has a price of $40. You are thinking of buying TargetCo, which has earnings per share of $2, 1 million shares outstanding, and a price per share of $25. You will pay for TargetCo by issuing new shares
Words: 674 - Pages: 3
FIN 516 Week 7 Homework Set To Buy This material Click below link http://www.uoptutors.com/fin-516-new/fin-516-week-7-homework-set Problem 31-1 on Exchange Rates Based on Chapter 31 International Corporate Finance You are a U.S. investor who is trying to calculate the present value of a €5 million cash inflow that will occur 1 year in the future. The spot exchange rate is S = $1.25/€ and the forward rate is F1 = $1.215/€. You estimate that the appropriate dollar discount rate for this cash flow
Words: 625 - Pages: 3
FIN 516 Week 2 Homework Problem http://homeworkregency.com/downloads/fin-516-week-2-homework-problem/ Problem 14-11 Based on Chapter 14: WACC and Modigiani & Miller Extension Models With Growth Assumptions Consider the entrepreneur described in Section 14.1 (and referenced in Tables 14.1–14.3). Suppose she funds the project by borrowing $750 rather than $500. a. According to MM Proposition I, what is the value of the equity? What are its cash flows if the economy is strong? What are its cash
Words: 368 - Pages: 2
FIN 516 Week 3 Homework Problem http://homeworkregency.com/downloads/fin-516-week-3-homework-problem/ Problem 20-6 on Call Options Based on Chapter 20 (Excel file included) You own a call option on Intuit stock with a strike price of $40. The option will expire in exactly 3 months’ time. a) If the stock is trading at $55 in 3 months, what will be the payoff of the call? b) If the stock is trading at $35 in 3 months, what will be the payoff of the call? c) Draw a payoff diagram showing
Words: 592 - Pages: 3
FIN 516 Week 4 Homework Problem http://homeworkregency.com/downloads/fin-516-week-4-homework-problem/ Problem 23-3 on Implied Price of Funding Based on Chapter 23 Starware Software was founded last year to develop software for gaming applications. Initially, the founder invested $800,000 and received 8 million shares of stock. Starware now needs to raise a second round of capital, and it has identified an interested venture capitalist. This venture capitalist will invest $1 million and wants
Words: 506 - Pages: 3
FIN 516 Week 5 Homework Problem http://homeworkregency.com/downloads/fin-516-week-5-homework-problem/ Problem 25-6 on Purchase Versus Lease Based on Chapter 25 Craxton Engineering will either purchase or lease a new $756,000 fabricator. If purchased, the fabricator will be depreciated on a straight-line basis over 7 years. Craxton can lease the fabricator for $130,000 per year for 7 years. Craxton’s tax rate is 35%. (Assume the fabricator has no residual value at the end of the 7 years.)
Words: 272 - Pages: 2
FIN 516 Week 6 Homework Problem http://homeworkregency.com/downloads/fin-516-week-6-homework-problem/ Problem 28-9 on Acquisition Analysis Based on Chapter 28 Mergers and Acquisitions (Excel file included) Your company has earnings per share of $4. It has 1 million shares outstanding, each of which has a price of $40. You are thinking of buying TargetCo, which has earnings per share of $2, 1 million shares outstanding, and a price per share of $25. You will pay for TargetCo by issuing
Words: 665 - Pages: 3
FIN 516 Week 7 Homework Problem http://homeworkregency.com/downloads/fin-516-week-7-homework-problem/ Problem 31-1 on Exchange Rates Based on Chapter 31 International Corporate Finance (Excel file included) You are a U.S. investor who is trying to calculate the present value of a €5 million cash inflow that will occur 1 year in the future. The spot exchange rate is S = $1.25/€ and the forward rate is F1 = $1.215/€. You estimate that the appropriate dollar discount rate for this cash flow
Words: 617 - Pages: 3
FIN 100 Week 5 Homework Answers To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-100-week-5-homework-answers/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 100 Week 5 Homework Answers 1. Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity if your first $5,000 is invested at the end of
Words: 345 - Pages: 2
FIN 516 Week 1 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-1-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 1 Homework Problem Problem 17-7 on Ex-dividend Price Based on Chapter 17 Payout Policy Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding with a current market
Words: 277 - Pages: 2
FIN 516 Week 2 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-2-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 2 Homework Problem Problem 14-11 Based on Chapter 14: WACC and Modigiani & Miller Extension Models With Growth Assumptions Consider the entrepreneur described in Section 14.1 (and referenced in Tables 14.1–14.3)
Words: 399 - Pages: 2
FIN 516 Week 3 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-3-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 3 Homework Problem Problem 20-6 on Call Options Based on Chapter 20 (Excel file included) You own a call option on Intuit stock with a strike price of $40. The option will expire in exactly 3 months’ time. a) If
Words: 623 - Pages: 3
FIN 516 Week 4 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-4-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 4 Homework Problem Problem 23-3 on Implied Price of Funding Based on Chapter 23 Starware Software was founded last year to develop software for gaming applications. Initially, the founder invested $800,000 and received
Words: 537 - Pages: 3
FIN 516 Week 5 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-5-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 5 Homework Problem Problem 25-6 on Purchase Versus Lease Based on Chapter 25 Craxton Engineering will either purchase or lease a new $756,000 fabricator. If purchased, the fabricator will be depreciated on a straight-line
Words: 303 - Pages: 2
FIN 516 Week 6 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-6-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 6 Homework Problem Problem 28-9 on Acquisition Analysis Based on Chapter 28 Mergers and Acquisitions (Excel file included) Your company has earnings per share of $4. It has 1 million shares outstanding, each of
Words: 696 - Pages: 3
FIN 516 Week 7 Homework Problem To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-516-week-7-homework-problem/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 516 Week 7 Homework Problem Problem 31-1 on Exchange Rates Based on Chapter 31 International Corporate Finance (Excel file included) You are a U.S. investor who is trying to calculate the present value of a €5 million cash
Words: 648 - Pages: 3
FIN-516 – WEEK 1 HOMEWORK ANSWER KEY PROBLEM BASED ON CHAPTER 14 – RESIDUAL DIVIDENDS 1. Cash Dividends in 2012 will be: 3.0 Million X ( 1 + .08) = $3.24 Million 2. Dividend Payout Ratio in 2012: 3.24 / (15.0 X 1.08) = 20.0% 3. Net Income in 2012 is: (15.0 X 1.08) = $ 16.20 Capital Budget in 2012: $12.0 X 65% = $ 7.8 Million financed from Retained Earnings. Residual Dividends in 2012: $16.2 Million - $7.8 Million = $8.4 Million. Residual Dividends Payout Ratio:
Words: 283 - Pages: 2
FIN-516 – WEEK 1 HOMEWORK ANSWER KEY PROBLEM BASED ON CHAPTER 14 – RESIDUAL DIVIDENDS 1. Cash Dividends in 2012 will be: 3.0 Million X ( 1 + .08) = $3.24 Million 2. Dividend Payout Ratio in 2012: 3.24 / (15.0 X 1.08) = 20.0% 3. Net Income in 2012 is: (15.0 X 1.08) = $ 16.20 Capital Budget in 2012: $12.0 X 65% = $ 7.8 Million financed from Retained Earnings. Residual Dividends in 2012: $16.2 Million - $7.8 Million = $8.4 Million. Residual Dividends Payout Ratio: $8.4
Words: 283 - Pages: 2