Maryland Micro Brewers generated revenues of $12,125,800 with a 72 percent capital intensity ratio during the year
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Maryland Micro Brewers generated revenues of $12,125,800 with a 72 percent capital intensity ratio during the year ended September 30, 2011. Its net income was $873,058. With the introduction of a half dozen new specialty beers, management expects to grow sales by 15 percent next year. Assume that all costs vary directly with sales and that the firm maintains a dividend payout ratio of 70 percent. What will be the EFN needed by this firm? If the company wants to raise no more than $750,000 externally and is not averse to adjusting its payout policy, what will be the new dividend payout ratio?
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...
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Related Book For 
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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