The following information applies to Mars Bank: Assets at start of the planning period $10,500 million Capital
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Question:
The following information applies to Mars Bank:
- Assets at start of the planning period $10,500 million
- Capital at start of the planning period $1,150 million
- Dividend payout ratio (per annum) 35%
- Asset growth rate (per annum) 12%
- Return on assets (per annum) 1.1%
(i) Calculate the bank's projected capital ratio (show all workings). (3 marks)
(ii) If the target capital ratio is 12%, what is the capital shortage or excess in dollar terms (show all workings)? (3 marks)
Related Book For
Intermediate Accounting
ISBN: 978-1119048541
11th Canadian edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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