Change Corporation follows a strict residual dividend policy. Its debt-equity ratio is 1.4. a. If earnings for
Question:
Change Corporation follows a strict residual dividend policy. Its debt-equity ratio is 1.4.
a. If earnings for the year are $2.1 million, what is the maximum amount of capital spending possible with no new equity?
b. If planned investment outlays for the coming year are $6 million, will the company pay a dividend? If so, how much?
c. Does the company maintain a constant dividend payout? Why or why not?
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
a Since the company has a debtequity ratio of 14 they can ra...View the full answer
Answered By
Parvesh Kumar
I am an experienced Mathematics and Statistics tutor with 10 years of experience teaching students and working professionals. I love teaching students who are passionate to learn subjects or wants to understand any mathematics and statistics concept at graduation or master’s level. I have worked with thousands of students in my teaching career. I have helped students deal with difficult topics and subjects like Calculus, Algebra, Discrete Mathematics, Complex analysis, Graph theory, Hypothesis testing, Probability, Statistical Inference and more. After learning from me, students have found Mathematics and Statistics not dull but a fun subject. I can handle almost all curriculum of mathematics. I did B.Sc (mathematics), M.Sc (mathematics), M.Tech (IT) and am also Gate (CS) qualified. I have worked in various college and school and also provided online tutoring to American and Canadian students. I look forward to discussing with you and make learning a meaningful and purposeful
4+ Reviews
10+ Question Solved
Related Book For 
Essentials Of Corporate Finance
ISBN: 9780073405131
6th Edition
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan
Question Posted:
