Question: A company considers projects 1, 2 and 3 requiring initial capital outlays of $ 250,000, $ 300,000 and $ 450,000 respectively. The company finances its

A company considers projects 1, 2 and 3 requiring initial capital outlays of $ 250,000, $ 300,000 and $ 450,000 respectively. The company finances its investments 45% by debt and the rest by equity. Profits for the year amount to $ 950,000. If the company has a residual dividend policy, determine the total amount paid in dividends to shareholders?

Options:

$ 550,000
$ 500,000
$ 950,000
$ 450,000
$ 400,000

Step by Step Solution

★★★★★

3.53 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Solution 1 2 3 Initial capital 25000000 S30000000 45000000 a Debt 1125... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Determine the total dividends paid in each year to each class of shareholders of Exercise 13-10 under the assumption that the preferred shares are non-cumulative. Also determine the total dividends...

a). Draw a 3-dimensional picture of the carbon-nitrogen triple bond in acetonitrile that clearly shows the orbitals involved in forming the bond. You can ignore the core electrons on each atom, and...

Q1. Define Manhole. What are the objects of providing manhole in sewer line? Q2. Define BOD. Why COD value is greater than its BOD value?

Ezzell Enterprises has the following capital structure, which it considers to be optimal under present and forecasted conditions: Debt (long-term only) ........ 45% Common equity .......... 55 Total...

Janet Wu is treasurer of Wilson Paper Company, a manufacturer of paper products for the office and school markets. Wilson Paper is selling one of its divisions for $70 million cash. Wu is considering...

GiS Inc. has the following four projects on hand: The cash flow in the table is accumulative. Assume that RF = 5%, ERM = 12%, firm-beta = 1.2, after-tax cost of debt = 6.5%. The firm is financed by...

You have a $10 million capital budget and must make the decision about which investments your firm should accept for the coming year. Projects 1, 2, and 3 are mutually exclusive, and Project 4 is...

Consider a capital budgeting problem with five projects from which to select. Let us define binary variables x 1 = 1 if project 1 is selected, 0 otherwise; x 2 = 1 if project 2 is selected, 0...

Padini Concept, a local retail store in Malaysia, recorded the number of shoes purchased by customers (1 pairs, 2 pairs and 3 pairs) based on the number of clothes purchased (1, 2, and 3) for a...

The following trial balances were obtained from the financial records of two entities in the food industry, namely Crab Ltd (Crab) and Shrimp Ltd (Shrimp), for the financial year ended 28 February...

Explain why finding the sum of consecutive numbers by using the process in Exercise 3 requires that the product be divided by 2.

Summary operating data for Eco-Windows Company during the current year ended June 30, 20Y6, are as follows: cost of merchandise sold, $3,800,000; administrative expenses, $1,200,000; interest...

Standards: The importance of standards in the engineering environment. Give examples of several codes that a company may need if they are to improve: o The efficiency of a company. o Environmental...

Answer All questions Give more explainations Answer 1,2,3 questions More explanation 4G 1.1KB/s is l 48 Vo 4:33 PM Dinde by LCamScanner 0... 7.5 10 Lea 1.33 x 3 X3 Ssimple ukgon 3 3.99-4 . EF Cg Hy...

The addition of HBr to some alkenes gives a mixture of the expectedalkyl bromide and an isomer formed by rearrangment. outline the mechanism of formation and structure of products from the reactionof...

If a small percentage of iron were added to the Herkimer diamond, this diamond would take on the color A. Red B. Purple C. Citrine D. Pink "Herkimer Diamonds" Gem-quality "Herkimer Diamonds" are...

Opal and Amber are not classified as minerals but rather as mineraloids. This classification is based upon the fact that these mineraloids? A. lack an orderly arrangement of atoms B. occur naturally...

What is the lingula and where is it located? It is found in the neck and it is a gland used to aid digestion It is another name for the pleura of the lung. It is another name for the middle lobe of...

Please answer 1 2 and 3 CHAPTER 8 1. What types of property, plant, and equipment (PP&E) does the company own? Has the investment in PP&E increased or decreased during the period? 2. How much...

I have attached several files that include questions and answers... I Just need to know the formulas and steps used to solve each problem. If the Question does not have any calculations or require...

Need question E15-24 within this pdf document answered please. 2015 Cambridge Business Publishers | For the Personal Use of Amanda Rosena. Explain company valuation using market multiples based on...

This is a matter of CORPORATE FINANCE. Involves answering multiple choice questions, questions to be commented on and the resolution of 3 Cases. All questions should be answered by giving a FULL...

Problem 1 How does P & P determine the value for Levels 1, 2 and 3 investments? Problem 3 Why would foreign currency translation decrease from 2013 to 2014? Problem 5 Using the following format...

Compute these ratios for each of the last three years. Total Assets Turnover Ratio=sales (or operating) revenue/Average total assets Return on Assets= Net earnings+Interest expense(net of...