Last year, Headline News Corporation paid $600,000 in dividends and retained $200,000 of the earnings it generated. The company follows a constant payout ratio dividend policy. If Headline generates $1.17 million in income this year, how much will be paid in dividends? Round your answer to the nearest dollar. $
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- Pimento Inc. estimates that this year’s earnings will be $75 million. There are 12 million shares outstanding at a price of $27.50 per share. Pimento had been following a 100% dividend payout policy until now but would now like to shift to the Residual Dividend policy for this year. Dividends from this year’s earnings are paid next year. a) What is the EPS and DPS for Pimento under the 100% dividend payout policy? b) If the planned capital outlay is for $72 million and the target capital structure is 1.5:1, willPimento be able to pay dividends as per the Residual Dividend Policy? If so, what will be the dividend per share? Investors require a 22.72% rate of return. Ignore taxes. c) IfPimento shifts from a 100% payout policy to the residual dividend policy, what impact will this have on its stock price, assuming the firm earns 22.72% as its ROE? Support your argument through relevant computations. Which argument of the dividend policy decision would you have demonstrated…Breakaway wealth had net earnings of $336,000 this past year. dividends were paid of $77,280 on the company's book equity of $2,800,000. if Safeway has 175,000 shares outstanding with a current market price of $21 per share, what is the required rate of return?Collins Inc. has just paid its annual dividend of $2.2. The company expects that its dividends in the first three years will be $1.9, $2.3, and $2.7, respectively. The company estimates an EPS in year three to be $5.6 , the EPS in year four to be $6.0, and the median leading industry P/E in year three to be 20. Calculate Collins Inc. current value if the cost of equity is 14%.
- Last year, Park Keeper Inc (PKI) earned $18 per shared and reinvested all of its earnings in the company. PKI expects earnins to grow at 20% for the next 3 years. At the end of year 3, PKI will distribute 25% of the year 3 earnings to investors. What do you expect the year 3 dividedends to be?The newspaper reported last week that Bennington Enterprises earned $34.09 million this year. The report also stated that the firm's return on equity is 18 percent. The firm retains 70 percent of its earnings. What is the firm's earnings growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What will next year's earnings be? (Do not round intermediate calculations and enter your answer in dollars, 'not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) Earnings growth rate Next year's earnings %The newspaper reported last week that Chen Enterprises earned $34.05 million this year. The report also stated that the firm's return on equity is 15 percent. The firm retains 85 percent of its earnings. a. What is the firm's earnings growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What will next year's earnings be? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) Earings growth rate Next year's earnings %
- Michael's, Inc., just pald $2.35 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 5.1 percent. If you require a rate of return of 9.3 percent, how much are you willing to pay today to purchase one share of the company's stock?The newspaper reported last week that Bennington Enterprises earned $17 million this year. The report also stated that the firm’s ROE is 14 percent. Bennington retains 70 percent of its earnings. a. What is the firm's earnings growth rate? (Round the answer to 2 decimal places.) Earnings growth rate % b. What will next year's earnings be? (Enter the answer in dollars, not millions of dollars. Omit $ sign in your response.) Next year's earnings $The newspaper reported last week that Tisch Enterprises earned $34.17 million this year. The report also stated that the firm’s return on equity is 18 percent. The firm retains 75 percent of its earnings. What is the firm's earnings growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Earnings growth rate % What will next year's earnings be? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Next year’s earnings $
- he newspaper reported last week that Tisch Enterprises earned $34.17 million this year. The report also stated that the firm’s return on equity is 18 percent. The firm retains 75 percent of its earnings. What is the firm's earnings growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Earnings growth rate % What will next year's earnings be? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Next year’s earnings $ Synovec Corp. is experiencing rapid growth. Dividends are expected to grow at 28 percent per year during the next three years, 18 percent over the following year, and then 5 percent per year indefinitely. The required return on this stock is 10 percent, and the stock currently sells for $98 per share. What is the projected dividend for the coming year? (Do not round intermediate…Tip Top Hats (TTH) is expected to grow at a 2 percent rate for as long as it is in business. Currently the company's common stock is selling for $36 per share. The most recent dividend paid by TTH was $2.00 per share. If new common stock is issued, TTH will incur flotation costs equal to 8.0 percent. What is the company's cost of retained earnings? Round your answer to two decimal places. % What is its cost of new common equity? Round your answer to two decimal places. %The Wei Corporation expects next year's net income to be $10 million. The firm is currently financed with 55% debt. Wei has $8 million of profitable investment opportunities, and it wishes to maintain its existing debt ratio. According to the residual distribution model (assuming all payments are in the form of dividends), how large should Wei's dividend payout ratio be next year? Round your answer to two decimal places.