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.
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Answer:
dirty price: 1,225.39
Explanation:
When we purchase the bond, we are paying the bond and the accrued interest
<em>bond price:</em> 1,000 x 120.59375/100 = 1,205.9375 = 1,205.94
accrued interest at purchase:
face value x bond coupon rate x time
1,000 par value x 6% x 59/(59+2+121) =
1,000 x 0.06 x 59/182 = <em>19,45</em>
Total amount for the bonds: 1,205.94 + 19.45 = 1,225.39
Answer:
The answer is 'Buy a Stock Index Future'
Explanation:
To take best advantage of this situation, Mr Smith should go long(buy) on this stock.
Stock Index Future js a method of derivates. Futures, like forward contract is a forward commitment which obligates the buyer to purchase an asset or the seller to sell an asset and have a predetermined future date and price. Future is used to hedge against worse future situations.
E.) Opportunity cost is the cost associated with giving up one opportunity for the benefit earned by another.
