A firm with existing sales of $75,000,000 and a pretax margin of 6% is thinking about expanding into a new market. This will require an investment of $1,800,000. The company's tax rate is 35% and the company's existing P/E ratio is 14 and debt is $15,000,000. 

Question:

Can the company pay a dividend of $0.30 per share? At this time the company has 2.0 million shares outstanding. What is the maximum amount of CAPEX the company can do?

Answer rating: 100% (QA)

To determine if the company can pay a dividend of 030 per share we need to calculate the available e... View the full answer