i wont to this question answer general accounting question ABC Industries has a capital budget of $4,000,000with a target capital structure of 30% debt and 70%equity. Expected dividends are $800,000. Calculatethe dividend payout ratio under a residual dividendpolicy.

Step 1: DefinitionDividend Payout Ratio: The dividend payout ratio is the percentage of net income…

Answered: ABC Industries has a capital budget of…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter13: Capital Structure Concepts

Section: Chapter Questions

Problem 6P

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Altamonte Telecommunications has a target capital structure that consist of 70% debt and 30% equity. The company anticipates that its capital budget for the upcoming year will be $2,000,000. If Altamonte reports net income of $1,100,000 end it follows a residual, dividend, payout policy, what will be its dividend payout ratio? Round your answer to two decimal places.
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The target capital structure consists of... Please solve this financial accounting question
Strategic Systems Inc. expects to have net income of P800,000 during the next year. Its target, and current, capital structure is 40 percent debt and 60 percent common equity. The Director of Capital Budgeting has determined that the optimal capital budget for next year is P1.2 million. If Strategic uses the residual dividend model to determine next year's dividend payout, the expected dividend payout ratio would be %
Strategic Systems, Inc., expects net income of $800,000 for next year. Its target capital structure is 40 percent debt and 60 percent common equity. The Director of Capital Budgeting has determined that the optimal capital budget for next year is $1.2 million. If Strategic uses the residual dividend policy to determine next year’s dividend payout, what is the expected payout ratio? 0% 10% 67% 80% 90%
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A company follows a strict residual dividend policy. It has a capital budget of $3,000,000 and a target capital structure that consists of 40% debt and 60% equity. Net income is forecast to be $2,500,000. Calculate the expected dividend payout ratio. Select one: O a. 28.00% b. 72.00% O c. 38.75% Od. 64.71% A
Assume that the SSC has an $800,000 capital budget planned for the coming year. You have determined that its present capital structure (60% equity and 40% debt) is optimal, and its net income is forcasted at $600,000. Use the residual dividend model to determine SSC's total dollar dividend and payout ratio. In the process, explain how the residual dividend model works. Then explain what would happen if expected net income was $400,000 or $800,000.
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Medtronics has a target capital structure that consists of 55% debt and 45% equity. Medtronics' capital budget next year will be $12,000,000. Given that the company follows a residual dividend policy and its most recent yearly net income is $6,000,000, determine the Medtronics' dividend payout ratio. Note: Dividend payout ratio = dividends/net income. Answer choices: 10% 30% 45% 25%
A company has determined that its optimal capital structure consists of 40 percent debt and 60 percent equity.Given the following information, calculate the firm's cost of capital (WACC).rd= 7%, Tax rate = 40%, P0 = $20, Growth = 0%, D0 =$2.00
A firm expects to have net income of $5,000,000 during the next year. The company’s target capital structure is 60% debt and 40% equity. The company's director of capital budgeting has determined that the optimal capital budget for the coming year is $5,000,000. If MSL Tech follows a residual distribution policy (with all distributions in the form of dividends) to determine the coming year’s dividend, then what is the firm’s expected dividend payments? $2,000,000 $3,000,000 $5,000,000 $6,000,000 Using the data from Question 31, find the dividend payout ratio for the company. 20% 40% 60% 50%

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ABC Industries has a capital budget of $4,000,000 with a target capital structure of 30% debt and 70% equity. Expected dividends are $800,000. Calculate the dividend payout ratio under a residual dividend policy.