Open Door Manufacturer earned $100,000 this year. The company follows the residual dividend policy when paying dividends. Open Door has determined that it needs a total of $120,000 for investment in capital budgeting projects this year. If the company’s debt-to-asset ratio is 50 percent, what will its dividend payout ratio be this year?
Answer to relevant QuestionsLast year the Bulls Business Bureau (BBB) retained $400,000 of the $1 million net income it generated. This year BBB generated net income equal to $1.2 million. If BBB follows the constant dividend payout ratio dividend ...Describe the cash conversion cycle. How can a financial manager use knowledge of the cash conversion cycle to better manage the firm’s working capital?What are the elements of a firm’s credit policy? To what extent can firms set their own credit policies as opposed to having to accept policies that are dictated by “the competition”?a. If a firm buys under terms of 3/15, net 45, but actually pays on the 20th day and still takes the discount, what is the APR of its nonfree trade credit?b. Does the firm receive more or less credit than it would if it paid ...Green Thumb Garden Centers sells 100,000 bags of lawn fertilizer annually. The optimal safety stock (which is on hand initially) is 1,200 bags. Each bag costs Green Thumb $4, inventory carrying costs are 20 percent, and the ...
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