1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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%

You might be interested in
when perfectly competitive firm X sells three units of product Z, its marginal revenue is $4.67. when it sells one hundred units
Ghella [55]

Answer:

B) $4.67

Explanation:

By definition marginal revenue is the revenue generated by the sale of one more unit of product Z.

Marginal revenue = unit price

Since firm X participates in a perfectly competitive market, it is a price taker, and since the marginal revenue is constant, we can assume that this is the equilibrium price of product Z.  

3 0
3 years ago
Big Box Store has operated with a 30% average gross profit ratio for a number of years. It had $100,000 in sales during the seco
nydimaria [60]

Answer:

c) $20,000.

Explanation:

The computation of the estimated ending inventory is shown below:

We know that

Cost of goods sold = Beginning inventory + purchase made - ending inventory

And, the

Sales - gross profit = Cost of goods sold

$100,000 - $100,000 × 30% = Cost of goods sold

So, cost of goods sold would be

= $100,000 - $30,000

= $70,000

Now the ending inventory would be

$70,000 = $18,000 + $72,000 - ending inventory

$70,000 = $90,000  - ending inventory

So, the ending inventory would be

= $90,000 - $70,000

= $20,000

5 0
3 years ago
A firm receives the proceeds from the sale of its securities in the _________________ market. over-the-counter secondary New Yor
harkovskaia [24]

In the stock exchange market, a firm does receives the proceeds from the sale of its securities in the primary market.

<h3>What is primary market in stock exchange market?</h3>

Basically, the primary market is the market where securities are created and sold to the public by various firms.

In this market, different firm sells new stocks, bonds etc to the public for the first time.

In conclusion, in the stock exchange market, a firm does receives the proceeds from the sale of its securities in the primary market.

Read more about primary market

<em>brainly.com/question/3904762</em>

8 0
3 years ago
An Organization pays $65,000 in Social Security taxes for its employees. When payroll liabilities are journalized, how mucus ent
tatyana61 [14]

Answer:

It's NOT $65,000

Explanation:

the test

7 0
2 years ago
"If the top two companies in the golf club industry merged, their new market share would equal 15% of the market. This industry'
Yakvenalex [24]

Answer:

Yes, the FTC would ignore the merger and allow it to go through.

Explanation:

here are the options to the question ;

O No, the FTC would probably challenge the merger

O Maybe. The FTC would scrutinize the merger and make a case-by-case decislon.

Yes, the FTC would ignore the merger and allow it to go through.

HHI is used to calculate market power.

if the HHI index is less than 1000 post merger, the merger would be allowed to go through.

If the HHI index is between 1000 - 1800 post merger and the change in HHI is more than 100 after the merger, The FTC would scrutinize the merger and make a case-by-case decislon.

If the HHI index is more than 1800 post merger and the change in HHI is more than or equal to 50, he FTC would probably challenge the merger

4 0
3 years ago
Other questions:
  • Denny Co. sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year, or thr
    9·1 answer
  • What is the total cost to conduct a market research survey with a $500 base fee plus $3 per question and $1.25 per person survey
    9·2 answers
  • George has been working as a laborer at a construction company for five years. He is very diligent on the job and has never been
    13·1 answer
  • You decide to take part time job to help with college expenses hours available for study are thus reduced the reduction in study
    5·2 answers
  • When determining the level of control and independence of an employee or independent contractor, which category covers how the w
    9·1 answer
  • Thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as
    10·1 answer
  • The amount of risk that will remain in a portfolio depends on the degree to which the stocks are exposed to:______
    5·1 answer
  • Which situation best illustrates the effects of inflation?
    12·1 answer
  • Which examples demonstrate tasks commonly performed in Construction jobs? Check all that apply.
    14·1 answer
  • if people demand more netflix subscriptions when the price of hulu subscriptions falls, then netflix and hulu are:
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!