All categories

1 year ago

In general terms, how would a change in investment opportunities affect the payout ratio under the residual payment policy?

Business

1 answer:

adell [148]1 year ago

6 0

Companies with residual dividend policies priorities paying capital expenditures out of earnings.

<h3>What is payout ratio?</h3>

The payout ratio, which is calculated as a percentage of the firm's total earnings, demonstrates the part of earnings that a company distributes to its shareholders in the form of dividends. By dividing the total dividends given out by the net income made, the computation is arrived at.

For dividend investors, the dividend payout ratio is a crucial indicator. It demonstrates how much of a company's earnings are distributed to investors. The higher that number, the less cash a corporation has left over to fund dividend growth and corporate expansion.

Companies with residual dividend policies priorities paying capital expenditures out of earnings. Any unused revenues are then used to pay dividends. Long-term debt and equity are often both parts of a company's capital structure.

To learn more about payout ratio refer to:

brainly.com/question/13083753

#SPJ4

You might be interested in

An employee earns $5,550 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $127,200

omeli [17]

Answer:

The amount the employer should record as payroll taxes expense for the employee for the month of January is $695.75

Explanation:

According to the given, The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 4.4%.

The remainder are taken out of the employees' checks as part of their responsibility.

Therefore, to calculate the amount the employer should record as payroll taxes expense for the employee for the month of January we would have to make the following calculation:

Total payroll expense=($5,500 x 0.062) + ($5,500 x 0.0145) +($5,500 x 0.006) +($5,500 x 0.044)

Total payroll expense=$695.75

The amount the employer should record as payroll taxes expense for the employee for the month of January is $695.75

3 0

3 years ago

The Company is in the process of evaluating a new product using the following information: ∙ A new transformer has three product

Bad White [126]

Answer:

total loss for first year = ($96,000)

Explanation:

direct costs per 5,000 transformers = $55,000, or $11 per unit

indirect manufacturing overhead per 5,000 transformers = $45,000 or $9 per unit

destination charges per transformer = $2 each

customer service expenses = $0.40 per transformer

sales price:

year 1 = $20 x 15,000 = $300,000

year 2 = $24 x 15,000 = $360,000

year 3 = $28 x 15,000 = $420,000

total revenue = $1,080,000

total costs:

development costs = $45,000

setup costs = $15,000 x 3 per year x 3 years = $135,000

direct costs = $11 x 45,000 units = $495,000

manufacturing overhead costs = $9 x 45,000 = $405,000

sales and administrative costs = $2.40 x 45,000 = $108,000

total = $1,188,000

total operating life cycle loss = $1,080,000 - $1,188,000 = -$108,000

life cycle operating loss for first year:

total revenue = $300,000

- setup costs = $45,000

- direct costs = $165,000

- manufacturing overhead costs = $135,000

- S&A costs = $36,000

- 1/3 of development costs = $15,000

total loss = -$96,000

4 0

3 years ago

Instruments had retained earnings of $ 390 comma 000 at December 31, 2017. Net income for 2018 totaled $ 220 comma 000, and di

VashaNatasha [74]

Answer:

The retained earnings should Quartz report at December 31, 2018 is $570,000

Explanation:

In this question, we apply the retained earnings equation which is shown below:

Ending retained earnings balance = Beginning retained earning balance + net income - dividend paid

= $390,000 + $220,000 - $40,000

= $570,000

The net income should be added while dividend should be deducted for finding out the ending retained earnings balance

3 0

3 years ago

Arjen owns investment A and 1 bond B. The total value of his holdings is 1,529 dollars. Investment A is expected to pay annual c

zloy xaker [14]

Answer:

In order to find the present value of the bond we have to calculate the present value of investment A and subtract is from 1529. We can find the present value of A by discounting all its cash flows.

As the first cash flow is received today and the last will be received 3 years form now there will be a total of 4 cash flows

1) 218.19 (Will not be discounted as we are receiving it today in the present)

2) 218.19/1.0987 (Discount by 1 year as cash will be received in 1 year)

3) 218.19/1.0987^2 (Discount by 2 years as cash will be received in 2 years)

4) 218.19/ 1.0987^3 (Discount by 3 years as cash will be received in 3 years)

= 218.19 + 198.58 + 180.74+ 164.51 = 762.02

PV of Bond = 1529-762.09= 766.91

Semi annual coupons mean 2 payments a year. Bond B matures in 23 years which means a total of 46 payments (23*2). N=46. A coupon rate of 6.4 percent means that the bond pays $64 (0.064*1000) each year. $64 divided by 2 is 32 which is the amount of each semi annual payment Arjen receives. Pv= 766.91 FV = 1000

In a financial calculator put

PV= -766.91

N= 46

FV=1000

PMT= 32

and compute I

I is 4.38 and we will multiply it by 2 because the payments are semi annual. So we will get an I of 8.76

YTM= 0.0876

Explanation:

5 0

3 years ago

Consider the following totals: Revenues = $100,000; Operating costs and expenses = $45,000; Other revenues = $5,000; Income taxe

Sav [38]

Answer:

$55,000

Explanation:

The operating income of any entity can be calculated using the following formula:

Operating income=Net income+ income tax expense+ finance cost- other revenues

Net income in this question=$42,000

Income taxes=$18,000

finance cost=0

Other revenues=$5000

Operating income=$42,000+$18,000+0-$5000=$55,000

The operating income of any entity can also be calculated using the following formula:

Operating income=Revenues-operating costs

=$100,000-$45,000=$55,000

7 0

3 years ago