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timurjin [86]
3 years ago
9

Walsh Company is considering three independent projects, each of which requires a $4 million investment. The estimated internal

rate of return (IRR) and cost of capital for these projects are presented here:
Project H (high risk): Cost of Capital = 16% IRR = 19%
Project M (medium risk): Cost of Capital = 12% IRR = 13%
Project L (low risk): Cost of Capital = 9% IRR = 8%
Note that the project’s costs of capital vary because the projects have different levels of risk. The company’s optimal capital structure calls for 40% debt and 60% common equity, and it expects to have net income of $7,500,000.
Required:
a. If Walsh establishes its dividends from the residual dividend model, what will be its payout ratio?
Business
1 answer:
Softa [21]3 years ago
5 0

Answer:

36%

Explanation:

The computation of the dividend payout ratio is shown below:

The dividend payout ratio is

= (Dividend ÷ total net income) × 100

where,

Dividend = Net income - equity amount

The net income is $7,500,000

And, the equity amount is

= $8,000,000 × 60%

= $4,800,000

So, the dividend is

= $7,500,000 - $4,800,000

= $2,700,000

As we can see that the IRR is more than the cost of capital in case of project Project H and Project M so we take the equity amount of this two projects

Now the dividend payout ratio is

= ($2,700,000 ÷ $7,500,000) × 100

= 36%

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The business arrangement in the newspaper industry in which two separately owned papers in the same city are permitted to combin
musickatia [10]

Answer: Joint operating agreement

Explanation:

 The joint operating agreement is one of the concept that helps in protecting the business or the industry from the failure that helps in governing the partnership between any two organization.

In this type of agreement any two organization are basically contributing their power and the resources for producing the effective result.

According to the given question, the newspaper industry is one of the example of joint operating agreement in which two companies are permitted for combining their business. Therefore, Joint operating agreement is the correct answer.

8 0
3 years ago
The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly.
Bond [772]

Answer:

$60 per unit

Explanation:

Total overheads:

= Overheads of fabrication department + Overheads of assembly department

= $90,500 + $109,700

= $200,200

Total labor hours:

= Blinks + Dinks

= (1,013 × 4) +  (1,859 × 5)

= 4,052 + 9,295

= 13,347

Overhead rate per hour = Total overheads ÷ Total labor hours

                                        = $200,200 ÷ 13,347

                                        = $15 per hour

Total overhead cost for blinks:

= Total hours for blinks × rate per hour

= 4,052 × $15 per hour

= $60,780

Overhead cost per unit for Blinks:

= Total overhead cost for blinks ÷ Total units

= $60,780 ÷ 1,013

= $60 per unit

5 0
3 years ago
Can I have some help?
Kisachek [45]

Answer:

b

Explanation:

8 0
2 years ago
7.Which of the following customers are the most valued by a business? A. Average B. Major C. Below-average D. Loyal
alisha [4.7K]

7. a) Loyal customers are most valued because they continue to bring business over time

9. b) quality costs are all the costs that results from defects and that are incurred to prevent defects.

14. b) inseparability

16. a) fluctuating demand (fluctuation means change/going up and down)

19. a) one seller and many buyers.

6 0
2 years ago
Read 2 more answers
Les just bought a megaphone of root beer. As he drinks from the giant cup, he eventually becomes full. One of his friend's comme
MrMuchimi

Answer:

Sink-Cost Fallacy

Explanation:

According to my research on studies conducted by various behaviorists, I can say that based on the information provided within the question the mental bias that describes Les's behavior is called the Sink-Cost Fallacy. This fallacy/bias refers to when an individual relentlessly continues's a behavior solely because of the resources that they have invested, either being time, money, or effort. Which in this case since, Les invested money into the drink so he does not want to waste it even though it might make him sick.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

8 0
2 years ago
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