d. What is Keenan's long-run average return on equity? [Hint: g = Retention rate * ROE - (1.0 - Payout rate)(ROE).) Do not round Intermediate calculations, Round your answer to two decimal places e. Does a 2018 dividend of $7,000, Doo seem reasonable in view of your answers to parts cand d? If not, should the dividend be higher or lower? Select in 2017, the Keenan Company paid dividends totaling 12,930,000 on net income of $20 million. Note that 2017 ww normal year and that for the past 10 years, earings have grown at constant rate of 10%. However, in 2018, earnings are expected to jump to $36 million and the expects to have profitable investment opportunities of $17.2 million. It is predicted that Keenan will not be able to maintain the 2018 level of earrings growth because the high 2018 earning levels attributable to an exceptional profitable new product line introduced that year. Aner 2018, the combat will return to its previous 10% growth rate. Keenan's target capital structure is 40% debt and 60w equity. a. Calculate Keenan's total dividends for 2018 assuming that follows each of the following police 1. Its 2018 dividend payment is set to force dividends to grow at the long run growth rate in earnings. Write out your answers completely. For example, 25 million should be entered 25,000,000 Round your answer to the nearest cent 2. It continues the 2017 dividend payout ratio Write out your answers completely. For example, 25 milion should entered a 25,000,000. Do not round wermediate calculations. Round your answer to the nearest cent. $ 3. It uses a pure residual dividend policy (40% of the 57.2 million investment is financed with debt 60% with common URY). Write out your answers completely. For examples million should be entered as 25,000,000. Round your answer to the nearest cent 4. It employs a regular dividend-plus-extras policy, with the regular dividend being based on the long-run growth rate and the extra dividend being set according to the residual dividend policy. Write out your answers completely. For example, 25 million should be entered s 25,000,000. Round your answers to the nearest cent. Regular dividend Extra dividend : b. Which of the preceding policies would you recommend? -Select c. Assume that investors expect Keenan to pay total dividends of $7,000,000 in 2016 and to have the dividend grow at 10% after 2016. The stocks total market value is 1230 milion. What the company's cost of equity Round your answer to two decimal places d. What is Keenan's long-run average return on equity? [Hint: 9 - Retention rate x ROE - (1.0 - Payout rate)(ROE)) Do not round intermediate calcuations. Round your answer to the decimal places e Does a 2018 dividend of $7,000,000 seem reasonable in view of your answers to parts and dir not, should the dividend be higher or lower? -Select- d. What is Keenan's long-run average return on equity? [Hint: g = Retention rate * ROE - (1.0 - Payout rate)(ROE).) Do not round Intermediate calculations, Round your answer to two decimal places e. Does a 2018 dividend of $7,000, Doo seem reasonable in view of your answers to parts cand d? If not, should the dividend be higher or lower? Select in 2017, the Keenan Company paid dividends totaling 12,930,000 on net income of $20 million. Note that 2017 ww normal year and that for the past 10 years, earings have grown at constant rate of 10%. However, in 2018, earnings are expected to jump to $36 million and the expects to have profitable investment opportunities of $17.2 million. It is predicted that Keenan will not be able to maintain the 2018 level of earrings growth because the high 2018 earning levels attributable to an exceptional profitable new product line introduced that year. Aner 2018, the combat will return to its previous 10% growth rate. Keenan's target capital structure is 40% debt and 60w equity. a. Calculate Keenan's total dividends for 2018 assuming that follows each of the following police 1. Its 2018 dividend payment is set to force dividends to grow at the long run growth rate in earnings. Write out your answers completely. For example, 25 million should be entered 25,000,000 Round your answer to the nearest cent 2. It continues the 2017 dividend payout ratio Write out your answers completely. For example, 25 milion should entered a 25,000,000. Do not round wermediate calculations. Round your answer to the nearest cent. $ 3. It uses a pure residual dividend policy (40% of the 57.2 million investment is financed with debt 60% with common URY). Write out your answers completely. For examples million should be entered as 25,000,000. Round your answer to the nearest cent 4. It employs a regular dividend-plus-extras policy, with the regular dividend being based on the long-run growth rate and the extra dividend being set according to the residual dividend policy. Write out your answers completely. For example, 25 million should be entered s 25,000,000. Round your answers to the nearest cent. Regular dividend Extra dividend : b. Which of the preceding policies would you recommend? -Select c. Assume that investors expect Keenan to pay total dividends of $7,000,000 in 2016 and to have the dividend grow at 10% after 2016. The stocks total market value is 1230 milion. What the company's cost of equity Round your answer to two decimal places d. What is Keenan's long-run average return on equity? [Hint: 9 - Retention rate x ROE - (1.0 - Payout rate)(ROE)) Do not round intermediate calcuations. Round your answer to the decimal places e Does a 2018 dividend of $7,000,000 seem reasonable in view of your answers to parts and dir not, should the dividend be higher or lower? -Select