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Nookie1986 [14]
3 years ago
10

Petersen Company has a capital budget of $1.0 million. The company wants to maintain a target capital structure that is 55% debt

and 45% equity. The company forecasts that its net income this year will be $800,000. If the company follows a residual distribution model and pays all distributions as dividends, what will be its payout ratio?
Business
1 answer:
kenny6666 [7]3 years ago
7 0

Answer: 43.75%

Explanation:

Payout ratio = Dividends paid / Earnings

Company has a Capital budget of $1 million which must be financed by 45% equity.

= 1,000,000 * 45%

= $450,000

This will be taken from the Net income which would leave the following for dividends;

= 800,000 - 450,000

= $350,000

Payout ratio = 350,000/800,000

= ‭0.4375‬

= 43.75%

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Answer:

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3 years ago
How do you think each of the following affected the world price of oil? (Use basic demand and supply analysis.)
My name is Ann [436]

The correct answer is the following.

A) Tax credits were offered for expenditures on home insulation. Affected the demand by decreasing it and the price decrease.

B) The Alaskan oil pipeline was completed. Affect the increase of supply and the price and the price decreases.

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D) Oil was discovered in the North Sea. Affect the supply by increasing it and the price decreases.

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