The management of Russel Inc. is trying to decide whether it can increase its dividend. During the current year, it reported net income of $875,000. It had cash provided by operating activities of $643,000, paid cash dividends of $80,000, and had capital expenditures of $280,000. Compute the companys free cash flow, and discuss whether an increase in the dividend appears

Chapter 13, Brief Exercises #11

The management of Russel Inc. is trying to decide whether it can increase its During the current year, it reported net income of $875,000. It had cash provided by operating activities of $643,000, paid cash dividends of $80,000, and had capital expenditures of $280,000. Compute the company’s free cash flow, and discuss whether an increase in the appears warranted. What other factors should be considered?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...