A company with a target D/E ratio of 1.2 reported earnings of $220,000 for the period just

Fantastic news! We've Found the answer you've been seeking!

Question:

A company with a target D/E ratio of 1.2 reported earnings of $220,000 for the period just ended. If the company uses a residual dividend policy and declared total dividends of $44,000, what is its addition to retained earnings?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

See More Books

Posted Date: Feb 20, 2024 11:49 PM

See More Questions

Sheehan Corp. is forecasting an EPS of $3.00 for the coming year on its 500,000 outstanding shares of stock. Its capital budget is forecasted at $800,000, and it is committed to maintaining a $2.00...
Matoika Mfg.has a 38% tax rate. They issued a 25-year, 12% semiannual bond 3 years ago. The bond currently sells for 94%. The book value of the debt issue is $40 million. There is a second debt issue...
60 water beetles were caught and marked before being released to their pond. The next day, another 60 water beetles were caught; 20 of which had been marked. A bout how many water beetles were in the...
In Exercises 3336, use possible symmetry to determine whether each graph is the graph of an even function, an odd function, or a function that is neither even nor odd. ------ -2, y CI (0,4) 2 14...
Rick Kleckner NV recorded a right-of-use asset for 300,000 as a result of a lease on December 31, 2018. Kleckner's incremental borrowing rate is 8%, and the implicit rate of the lessor was not known...
For the problem specified in the table, build upon the results of the original problem to obtain a preliminary design of the shaft by performing the following tasks. (a) Sketch a general shaft...
Records show that the probability is 0.00008 that a truck will have an accident on a certain highway. Use the formula for the Poisson distribution to approximate the probability that at least 5 of...
Vincent Cuomo is the credit manager for the Fine Fabrics Mill. He is currently faced with the question of whether to extend $100,000 of credit to a potential new customer, a dress manufacturer....
How many gallons are in a rectangular reservoir if the water pressure at the bottom is 5.3psi? The reservoir is 40feet long, 30 feet wide, and 20 feet high
After researching the different forms of business organization. Natalie Koebel decides to operate Cookie Creations as a proprietorship. She then starts the process of getting the business running. In...
Suppose in its income statement for the year ended June 30, 2017, The Clorox Company reported the following condensed data (dollars in millions). Salaries and wages expenses $ 480 Research and...
When auditing lease accounting, auditors perform various procedures to ensure compliance with accounting standards and regulations. Here are some key audit procedures specifically related to...
On Dec 31, 2023, you paid $1,000 to purchase a bond, which matures on Dec 31, 2026 with a coupon 5% (annual) and a face value of $1,000. According to the latest news, you expect that Fed will...
A new photocopier costs $12,000 and Seeknom plans to purchase it to lease it out to his customer . Seeknom pays taxes at a rate of 50%. The photocopier is to be depreciated straight-line to zero over...
In preparing a ratio analysis for Coca-Cola and PepsiCo, identify the liquidity, leverage, profitability, asset management, and price ratios as well as the trading statistics of both firms. Compare...
Consider the following three projects: YEAR 0 1 2 3 4 5 6 Project A -$1 -$1 -$1 -$1 -$1 $10 $20 Project B -$500 -$500 $0 $0 50 $0 $500 $600 Project C -$500 $0 $0 $600 $0 $0 $0 Assume an interest rate...
A calorimeter is used to: O a. Determine the heat given off or absorbed during some process O b. none of these C. O c. Store the heat from a chemical reaction. O d. Determine the heat of a reaction
An example of prescriptive analytics is when an action is recommended based on previously observed actions. For example, an analysis might help determine procedures to follow when new accounts are...
Cash offer versus Right offer Ren-Stimpy international is planning to raise fresh equity capital by selling a large new issue of common stock. Ren-Stimpy is currently a publicly traded corporation,...
Stock Valuation most corporations pay quarterly dividends on their common stock rather than annual dividends. Barring any unusual circumstances during the year, the board raises, lowers, or maintains...
Growth and DebtEquity Ratio A firm wishes to maintain a growth rate of 14 percent and a dividend payout ratio of 40 percent. The ratio of total assets to sales is constant at .8, and profit margin is...
Which of the following is not an approach that can be used to perform a capital budgeting economic analysis? a. Box-Jenkins algorithm b. Excel SOLVER c. Exhaustive enumeration d. Lori-Savage...
A lending firm is considering six independent and indivisible investment alternatives that can be exited with a full refund of the initial investment at any time the firm chooses. A total of \(\$...
A division of ConocoPhillips is involved in their periodic capital budgeting activity, and the engineering and operations staffs have identified 10 indivisible investments with cash flow parameters...

A company with a target D/E ratio of 1.2 reported earnings of $220,000 for the period just

Question:

Expert Answer:

To calculate the addition to retained earnings for a company using a residual dividend policy we fir... View the full answer

Fundamentals of Corporate Finance

Students also viewed these finance questions