Manpower, which provides nongovernment employment services in the United States, reported net income of $128 million in 1995. It had capital expenditures of
$50 million and depreciation of $24 million in 1995, and its working capital was $500 million (on revenues of $5 billion). The firm has a debt ratio of 10% and plans to maintain this debt ratio.
a. Estimate how much Manpower will have available to pay out as dividends next year.
b. The current cash balance is $143 million. If Manpower is expected to pay $12 million in dividends next year and repurchase no stock, estimate the expected cash balance at the end of the next year.

  • CreatedApril 15, 2015
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