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4vir4ik [10]
3 years ago
7

ABC Company wishes to maintain sales growth of 14% per year and a debt/equity ratio of 0.30. The profit margin is 6.2% and the r

atio of total assets to sales is constant at 1.55. What dividend payout ratio should Bulla choose to achieve 14% sales growth? Is this dividend payout ratio possible?
Business
1 answer:
oksano4ka [1.4K]3 years ago
6 0

Answer:

Bulla should choose to achieve 41% of dividend payout ratio with this growth.

Explanation:

Debt to Equity ratio = 0.3

Debt / Equity = 0.3

As we know the debt ratio to Equity is calculated when equity is considered one.

So,

Total Asset to sales = 1.55

Profit Margin ratio = 6.2%

ROE = Profit Margin x Total Assets to sales ratio

ROE = 6.2% x 1.55

ROE = 0.0961

Sustainable Growth rate = (ROE * Retention Ratio)/(1 - ROE*Retention Ratio)

14% = ( 0.0961 x retention rate) / ( 1 - retention rate)

0.14 x ( 1 - retention rate) = 0.0961 x retention rate

0.14 - 0.14 retention rate = 0.0961 retention rate

0.14 = 0.0961 retention rate + 0.14 retention rate

0.14 = 0.2361 retention rate

Retention rate = 0.14 / 0.2361

Retention rate = 0.5930

Retention rate = 59.30%

Payout ratio = 100% - 59.3% = 40.7%

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Answer:

net income attributable to the non controlling interest is $40800

Explanation:

Given data

Race sold = $450000

cost = $330000

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to find out

net income attributable to the non controlling interest

solution

we find the non controlling interest

so we apply formula for non controlling interest that is

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put here value of net income

non controlling interest of income = net income × (20%)

non controlling interest of income = 204000 × (20%)

non controlling interest of income = 40800

so net income attributable to the non controlling interest is $40800

8 0
4 years ago
Identify and explainthe benefits and problems associated with high economic growth
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Answer:

Kindly check explanation

Explanation:

High economic growth is usually the aim of several economic policies whichnmost countries try to employ. The reason for this is no other than the numerous benefits attached to it which includes;

Increase in GDP : With growth in the economy of a country, trading within and outside these countries will rise, leading to increase in revenue earned and hence, the gross domestic product. This will pave the way for :

Infrastructural development : The development of infrastructure and standard society will be on the horizon as the economy grows. There is enough capital to embark on infrastructural development which will serve the populees

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High economic growth also has it's drawbacks which include ;

Higj Immigration level ; Businesses and individuals are always on the lookout for areas with good investment opportunity in which an high income society is usually a main target. With increasing immigration, overcrowding may result.

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5 0
3 years ago
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3 years ago
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The following information was taken from the records of Easter Corporation for the year ended December 31, 2019. Advertising exp
kirza4 [7]

Answer:

$162,520

Explanation:

As per the given question the solution of retained earnings is provided below:-

To reach at retained earning first we need to find out the total expenses and net income which are as follows:-

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= $40,000 + $26,000 + $23,400 + $33,800

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now,

Net income = Revenue - Expenses

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So, the Retained Earnings as of December 31, 2019 = Retained Earnings of January 1, 2019 + Net Income - Dividend

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The day begins in each Wal-Mart store with the manager leading the famous Wal-Mart cheer. The cheer is a fun and energetic way t
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4 years ago
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