In Problem 2.17 , suppose Raines Umbrella Corp. paid out $34,000 in cash dividends. Is this possible?
Question:
In Problem 2.17, suppose Raines Umbrella Corp. paid out $34,000 in cash dividends. Is this possible? If spending on net fixed assets and net working capital was zero, and if no new shares were issued during the year, what was the change in the firm’s long-term debt account?
During 2018, Raines Umbrella Corp. had sales of $630,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $470,000, $95,000, and $140,000, respectively. In addition, the company had an interest expense of $70,000 and a tax rate of 35 percent. (Ignore any tax loss carryback or carryforward provisions.)
Step by Step Answer:
A firm can still pay out dividends if net income is negative it just has to b...View the full answer
Corporate Finance
ISBN: 9781259270116
8th Canadian Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Roberts, Hamdi Driss
Related Video
Interest, debt, finance, and capital markets are all important concepts in the world of economics and business. Interest is the cost of borrowing money, and it is typically expressed as a percentage of the amount borrowed. Debt is the money that is borrowed, and it has to be repaid with interest. Finance is the study of how individuals, companies, and organizations manage their money and investments. Capital markets are the places where companies and governments can raise money by selling stocks and bonds to investors. These markets play an important role in the overall economy by helping to fund investment and growth.
Students also viewed these Business questions
-
In Problem 18, suppose Raines Umbrella Corp. paid out $ 34,000 in cash dividends. Is this possible? If spending on net fixed assets and net working capital was zero, and if no new stock was issued...
-
In Problem 2.17, suppose Raines Umbrella Corp. paid out $34,000 in cash dividends. Is this possible? If spending on net fixed assets and net working capital was zero, and if no new shares were issued...
-
In Problem 19, suppose Raines Umbrella Corp. paid out $25,000 in cash dividends. Is this possible? If spending on net fixed assets and net working capital was zero, and if no new stock was issued...
-
Suppose we want both the sensitivity and specificity to be at least 70%. Use the ROC curve to identify the possible value(s) to use as the cutoff for identifying people with dementia, based on these...
-
Let K be compact in R and let c R. Prove that there exists a point b in K such that |c - b| = sup{|c - x| : x K}.
-
Let f(x)= == 3x+7x-6 Find the equations of the horizontal asymptotes and the vertical asymptotes of f(x). If there are no asymptotes of a given type, enter 'NONE'. If there is more than one asymptote...
-
A construction engineer has to inspect 5 construction sites in a 2-day inspection schedule. He may or may not be able to visit these sites in two days. He will not visit any site more than once. (a)...
-
The ledger of Herrera, Inc. on March 31, 2022, includes the following selected accounts before adjusting entries. An analysis of the accounts shows the following. 1. Insurance expires at the rate of...
-
Connecting with customers is a strategic effort to create relationships beyond the initial transaction. It involves communication, but it is so much more. Connecting with customers is important...
-
Given: the atomic mass of calcium is 40.1 g/mole, and the atomic mass of chloride is 35.5 g/mole. What % solution is a 1 M CaCl, solution? a) 11.1% b) 0.11% c) 0.04% d) 33.3% e) 0.33%
-
During 2018, Raines Umbrella Corp. had sales of $630,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $470,000, $95,000, and $140,000, respectively. In...
-
Cusic Industries had the following operating results for 2018: sales = $19,900; cost of goods sold = $14,200; depreciation expense = $2,700; interest expense = $670; dividends paid = $650. At the...
-
Why might per capita GDP be only an imperfect measure of a countrys standard of living?
-
Sarah and Henry are married but have decided to file separate tax returns in 2022. During the year, Sarah earned $38,000 and Henry earned $17,000. Sarah's itemized deductions are $19,000 and Henry's...
-
All of the following are advantages of a computerized billing system except a. a procedure code fee schedule identifies the current price of each procedure. b. reports identifying past due accounts...
-
What is a budget? What is the master budget? What are the first and last budgets prepared in the master budget? What is a standard? What is the differences between an attainable or ideal standard? Is...
-
what is the company inventory reserve? INVENTORY VALUATION Inventories, substantially all of which are finished goods, are stated at lower of cost and net realizable value and valued on either an...
-
A new three-year CMO has two tranches. The 'A' tranche has a principal of $35.7 million with an annual coupon of 3.73%. The 'Z' tranche has a coupon of 5.69% with a principal of $41.9 million. The...
-
Wanda B. Rich is the CEO of Outlet Flooring, a discount provider of carpet, tile, wood, and laminate flooring. At the end of the year, the company's accountant provides Wanda with the following...
-
(a) Bright Sdn Bhd (BSB) is a tax resident manufacturing company in Johor, which involves in ceramic tiles. Currently, BSBs annual sales turnover has been forecasted to be around RM 300,000 for the...
-
What are the primary disadvantages of the corporate form of organization? Name at least two advantages of corporate organization?
-
In response to the Sarbanes-Oxley Act, many small firms in the United States have opted to go dark delist their stock. Why might a company choose this route? What are the costs of going dark?
-
In response to the Sarbanes-Oxley Act, many small firms in the United States have opted to go dark delist their stock. Why might a company choose this route? What are the costs of going dark?
-
Martinez Company buys merchandise on account from Marigold Company for $592. Martinez sells the goods to Ellis for $900 cash. Use a tabular summary to record the transactions for Martinez Company...
-
The section has tension and compression steel reinforcement. When the neutral axis depth is at infinity, c = , the section is in uniform compression, all points on the section have 0.003 compressive...
-
The Big Choo Choo Company (BCCC) owns a rail line from the town of Isolated to the coastal port of Notso. It cost them $20 million to build the rail line in 2016. It is now 2023. The Small Gold...
Study smarter with the SolutionInn App