Culver Co. invested $920,000 in Larkspur Co. for 25% of its outstanding stock. Larkspur Co. pays out
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Question:
Culver Co. invested $920,000 in Larkspur Co. for 25% of its outstanding stock. Larkspur Co. pays out 30% of net income in dividends each year.
Use the information in the following T-account for the investment in Larkspur to answer the following questions.
Investment in Larkspur Co. | |
920,000 | |
103,000 | |
30,900 |
(a) How much was Culver Co.’s share of Larkspur Co.’s net income for the year?
(b) What was Larkspur Co.’s total net income for the year?
(c) What was Larkspur Co.’s total dividends for the year?
(d) How much was Culver Co.’s share of Larkspur Co.’s dividends for the year?
Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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