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blackgoat580Lv1
18 Jun 2020
The Rose Water Company expects with some degree of certainty to generate the following net income and to have the following capital expenditures during the next five years (in thousands of dollars): Year 1 Year 2 Year 3 Net income (million $) 2 1.5 2.5 Capital Budget (million $) 1 1.5 2 The company currently has 1 million shares of common stock outstanding and pays annual dividends of $1 per share. The target capital structure is 100 percent equity. Determine dividends per share and external financing required in each year under residual dividend policy. Determine dividends per share and the amounts of external financing that will be necessary if a dividend-payout ratio of 50 percent is maintained.
The Rose Water Company expects with some degree of certainty to generate the following net income and to have the following capital expenditures during the next five years (in thousands of dollars): Year 1 Year 2 Year 3 Net income (million $) 2 1.5 2.5 Capital Budget (million $) 1 1.5 2 The company currently has 1 million shares of common stock outstanding and pays annual dividends of $1 per share. The target capital structure is 100 percent equity. Determine dividends per share and external financing required in each year under residual dividend policy. Determine dividends per share and the amounts of external financing that will be necessary if a dividend-payout ratio of 50 percent is maintained.
2 Jun 2021
