Salalah Plastic Company is engaged in manufacturing plastic bottles. The organization has total capital of OMR...

 

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Salalah Plastic Company is engaged in manufacturing plastic bottles. The organization has total capital of OMR 250,000. The organization has a target capital structure of 55% equity and 45% debt. The organization's forecasted net income is OMR 180,000. a. Calculate the residual income based on the net income of OMR 180,000? (6 Marks) b. Calculate the target pay-out ratio? (6 Marks) Assume if the organization's forecasted income OMR 100,000. c. Advice the management what they should do if the net income has dropped to OMR 100,000? (5 Marks) d. Advise the management of the company about various dividend policies? (8 Marks) Salalah Plastic Company is engaged in manufacturing plastic bottles. The organization has total capital of OMR 250,000. The organization has a target capital structure of 55% equity and 45% debt. The organization's forecasted net income is OMR 180,000. a. Calculate the residual income based on the net income of OMR 180,000? (6 Marks) b. Calculate the target pay-out ratio? (6 Marks) Assume if the organization's forecasted income OMR 100,000. c. Advice the management what they should do if the net income has dropped to OMR 100,000? (5 Marks) d. Advise the management of the company about various dividend policies? (8 Marks)

Answer rating: 100% (QA)

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