Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Chapter 14, Problem 14.5P

a)

Summary Introduction

To determine: The cash dividend payable by the firm to common stockholders.

Introduction:

Dividend is the portion of earnings of the company distributed to the shareholders of the firm.

b)

Summary Introduction

To determine: The effects of cash dividend of $0.80 on the company balance sheet.

c)

Summary Introduction

To discuss: The key constraints with respect to magnitude of the firms dividend payment when the firm unable to raise the new funds from external sources.

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He Dividend constraints A firm has $750,000 in paid-in capital, retained earnings of $38,000 (including the current year's earnings), and 25,000 shares of common stock outstanding. In the current year, it has $28,000 of earnings available for the common stockholders. ions a. What is the most the firm can pay in cash dividends to each common stockholder? (Assume that legal capital includes all paid-in capital.) b. What effect would a cash dividend of $0.96 per share have on the firm's balance sheet entries? c. If the firm cannot raise any new funds from external sources, what do you consider the key constraint with respect to the magnitude of the firm's dividend payments? a If legal capital is assumed to include all paid-in capital, the most the firm can pay in cash dividends to each common stockholder is $ (Round to the nearest cent.) Eriter your answer im the ainswer box and then click Check Answer. parts remaining Clear All Check Answer 10:38 pe here to search 5/8/2
e Home Dividend constraints A firm has $700,000 in paid-in capital, retained earnings of $33,000 (including the current year's earnings), and 25,000 shares of common stock outstanding. In the current year, it has $23,000 of earnings available for the common stockholders. a. What is the most the firm can pay in cash dividends to each common stockholder? (Assume that legal capital includes all paid-in capital.) b. What effect would a cash dividend of $1.29 per share have on the firm's balance sheet entries? c. If the firm cannot raise any new funds from external sources, what do you consider the key constraint with respect to the magnitude of the firm's dividend payments? gnments dy Plan a. If legal capital is assumed to include all paid-in capital, the most the firm can pay in cash dividends to each common stockholder is $ (Round to the nearest cent.) sults arson eText ultimedia Librai inancial Calculat Chapter Resource Enter your answer in the answer box and then click Check Answer.…
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Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)

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Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License