3)Pamela Rock (PR), Ine has been suffering from the high defection rates in its production. In...
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3)Pamela Rock (PR), Ine has been suffering from the high defection rates in its production. In order to overcome these issues, management has planned to renovate some of its manufacturing facilities. This project has been estimated to cost 23 million dollars. Currently firm's debt to equity ratio is 1.5 which the management thinks to be optimal. The firms has been paying out 55% of its earning as dividends. In 2017, firm has earned a net income of 13 million dollars. If the management aims to sustain its capital structure and dividend payout ratio for the following year, how much external equity is required to implement the renovation project? (P.S. Write a good conclusion) (50 marks) 3)Pamela Rock (PR), Ine has been suffering from the high defection rates in its production. In order to overcome these issues, management has planned to renovate some of its manufacturing facilities. This project has been estimated to cost 23 million dollars. Currently firm's debt to equity ratio is 1.5 which the management thinks to be optimal. The firms has been paying out 55% of its earning as dividends. In 2017, firm has earned a net income of 13 million dollars. If the management aims to sustain its capital structure and dividend payout ratio for the following year, how much external equity is required to implement the renovation project? (P.S. Write a good conclusion) (50 marks)
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Answer Hence the answer is 17310000 Amount added to reserve ... View the full answer
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
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