Question: Problem 6-11 This is a more difficult but informative problem. James Brodrick & Sons, Incorporated, is growing rapidly and, if at all possible, would like

Problem 6-11 This is a more difficult but informative problem. James Brodrick \& Sons, Incorporated, is growing rapidly and, if at all possible, would like to finance its growth without selling new equity. Selected information from the company's five-year financial forecast follows. Year Earnings after tax (\$ millions) Capital investment (\$ millions) Target book value debt-to-equity ratio (\%) Dividend payout ratio (\%) Marketable securities (\$ millions) (Year 0 marketable securities =$200 million) a. According to this forecast, what dividends will the company be able to distribute annually without raising new equity and while maintaining a balance of $200 million in marketable securities? What will the annual dividend payout ratio be? (Hint: Remember sources of cash must equal uses at all times.) Note: Round dividends to the nearest million dollars and the payout ratio \% to the nearest ones place

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