Weston Automotive has a capital budget of $1,500,000 and wants to maintain a target capital structure of 60% debt and 40% equity. The company expects to pay a dividend of $400,000. If the company follows a residual dividend policy, what is its forecasted dividend payout ratio? a. 32.50% b. 35.00% c. 37.50% d. 40.00%

Weston Automotive has a capital budget of $1,500,000 and wants to maintain a target capital structure of 60% debt and 40% equity. The company expects to pay a dividend of $400,000. If the company follows a residual dividend policy, what is its forecasted dividend payout ratio? a. 32.50% b. 35.00% c. 37.50% d. 40.00%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 3MC: Assume that IWT has completed its IPO and has a $112.5 million capital budget planned for the coming...

See similar textbooks

Similar questions

Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?
Arden Manufacturing follows a strict residual dividend policy. The companyis forecasting that its net income will be $500 million this year. The company anticipates that its capital budget will be $250 million.Thecompany has a target capital structure that consists of 50 percent equityand 50 percent long-term debt. What is the company’s anticipated dividendpayout ratio? a. 75%b. 55%c. 50%d. 25%e. 47%
Grandin Inc. is evaluating its dividend policy. It has a capital budget of $625,000, and it wants to maintain a target capital structure of 60% debt and 40% equity. The company forecasts a net income of $475,000. If it follows the residual dividend policy, what is its forecasted dividend payout ratio?a. 40.61%b. 42.75%c. 45.00%d. 47.37%e.49.74
Answer? ? Financial accounting question
Avant-Marlowe Technologies has a target capital structure that consists of 40% debt and 60% equity. The company anticipates that its capital budget for the upcoming year will be $30 million. If the firm reports net income of $20 million, and it follows a residual dividend policy, what will be its dividend payout ratio? Select one: a..67 b. .10 c. .42 d. .80 e..40
What is the dividend payout ratio of this financial accounting question?
Broske industries... Financial accounting
Please give me correct answer this financial accounting question
Get accurate answer this financial accounting question
What will its dividend payout ratio on these financial accounting question?
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
ABC Inc. has the following data. If it follows the residual dividend model, what is its forecasted dividend payout ratio? Capital budget % Debt Net income (NI) Select one: a. 49.20% b. 37.20% c. 31.60% d. 39.60% e. 40.00% $7,000 40% $7,000