Assume that SSC has a $112 5 million capital budget planned for the coming year You have determined its present capital structure (80 equity and 20 debt) is optimal, and its net income is forecasted at $140 million Use the residual distribution model approach to determine SSCs total dollar distribu...

We make the following points a Given the optimal capital budget and the target capital structure we ...

Assume that SSC has a $112.5 million capital budget planned for the coming year. You have determined

Question:

Assume that SSC has a $112.5 million capital budget planned for the coming year. You have determined its present (80% equity and 20% debt) is optimal, and its net income is forecasted at $140 million. Use the residual model approach to determine SSC’s total dollar Assume for now that the is in the form of a SSC has 100 million shares. What is the forecasted payout ratio? What is the forecasted per share? What would happen to the payout ratio and DPS if net income were forecasted to decrease to $90 million? To increase to $160 million?

Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...