Subject = general accounting Coral Reef Excursions (CRE) expects to grow at a constant rate of 5 percentindefinitely. Its target debt/assets ratio is 35 percent, and it expects to haveprofitable investments of $2.4 million this year. CRE plans to continue paying thesame dividend of $1.75 per share that it has paid for the past 8 years. The companyhas 800,000 shares of stock outstanding. If net income is expected to be $3.2million, what should be CRE's dividend payout ratio this year?

Step 1: Define Dividend Payout RatioThe Dividend Payout Ratio measures the proportion of net income…

Answered: Coral Reef Excursions (CRE) expects to…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

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Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 4P

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