The Hasting Sugar Corporation has the following pattern of net income each year, and associated capital expenditure projects. The firm can earn a higher return on the projects than the stockholders could earn if the funds were paid out in the form of dividends. Year 1: net income $13 million, Profitable Capital Expenditure $7 million Year 2 : net income 20 million profitable capital expenditure 12 million Year 3: net income 18 million profitable capital expenditure 6 million Year 4: net income 14 million profitable capital expenditure 8 million Year 5: net income 19 million profitable capital expenditure 9 million The Hastings Corporation has 3 million shares outstanding. If the firm simply uses a payout ratio of 20% net income, how much in total cash dividends will be paid? if the firm pays a 20% stock dividend in years 2 through 5, and also pays a cash dividend of $3.40 per share for each of the five years, how much in total dividends will be paid? Assume the payout ratio in each year is to be 20% of the net income and the firm will pay 10% stock dividend in years 2 through 5, how much dividends per share for each year be? Year 1, year 2, year 3, year 4, year 5
The Hasting Sugar Corporation has the following pattern of net income each year, and associated capital expenditure projects. The firm can earn a higher return on the projects than the stockholders could earn if the funds were paid out in the form of dividends.
Year 1: net income $13 million, Profitable Capital Expenditure $7 million
Year 2 : net income 20 million profitable capital expenditure 12 million
Year 3: net income 18 million profitable capital expenditure 6 million
Year 4: net income 14 million profitable capital expenditure 8 million
Year 5: net income 19 million profitable capital expenditure 9 million
The Hastings Corporation has 3 million shares outstanding.
If the firm simply uses a payout ratio of 20% net income, how much in total cash dividends will be paid?
if the firm pays a 20% stock dividend in years 2 through 5, and also pays a cash dividend of $3.40 per share for each of the five years, how much in total dividends will be paid?
Assume the payout ratio in each year is to be 20% of the net income and the firm will pay 10% stock dividend in years 2 through 5, how much dividends per share for each year be?
Year 1, year 2, year 3, year 4, year 5
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