Artis Sales has two store locations. Store A has fixed costs of $145,000 per month and a variable cost ratio of 60%. Store B has
fixed costs of $260,000 per month and a variable cost ratio of 30%. What is the break-even sales volume for Store A?A)$362,500.
B)$241,667.
C)Cannot determine with the information given.
D)$405,000.
B)$241,667.
C)Cannot determine with the information given.
D)$405,000.
1 answer:
You might be interested in
Answer: The dividend payout ratio is 46.19%.
We follow these steps in order to arrive at the answer:
We begin with the DuPont identity of RoE.
<u>DuPont Identity:</u>
Now,
And Debt Ratio is also expressed as:
where D/E represents the Debt-Equity Ratio.
Substituting the value of D/E ratio from the question in the debt ratio formula above we get,
----(1)
Substituting (1) in the equity multiplier formula above we get,
Substituting Equity Multiplier from above and the relevant numbers from the question in the DuPont identity we get,
The relationship between RoE and earnings growth rate g is given by the following formula:
, where p is the dividend payout ratio.
Plugging in the values in the formula above we get,
p = 0.461988304 or 46.19%