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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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Salsk061 [2.6K]

Answer:

Option (1) is correct.

Explanation:

The value of imports refers to the amount of goods that are purchased by the residents of the home country from the foreign country. While calculating the gross domestic product (GDP) of a particular nation the value of imports is subtracted from the value of exports of that nation.

The value of imports doesn't contribute towards the domestic production of United States because these goods are produced in the foreign country.

GDP = Consumption + Investment + Government spending + Net Exports

        = Consumption + Investment + Government spending + (Exports - Imports)

6 0
3 years ago
DogMart Company records depreciation for equipment. Depreciation for the period ending December 31 is $2,840 for office equipmen
Scorpion4ik [409]

Answer:

The journal entries are shown below:

Explanation:

According to the scenario, the journal entry for the given data are as follows:

For Office equipment

Dec.31  Depreciation for office equipment A/c Dr $2,840

            To Accumulated depreciation for office equipment A/c $2,840

(Being the depreciation expense for office equipment is recorded))

For Production equipment

Dec.31  Depreciation for production equipment A/c Dr $6,910

            To Accumulated depreciation for production equipment A/c $6,910

(Being the depreciation expense for production equipment is recorded))

4 0
3 years ago
Suppose you know a company's stock currently sells for $90 per share and the required return on the stock is 9 percent. You also
steposvetlana [31]

Answer:

$3.72

Explanation:

in order to determine the price of the stock we use the dividend discount model:

P₀ = Div₁ / (Re - g)

  • P₀ = $90
  • Div₁ = ?
  • Re = 9%
  • g = 9% / 2 = 4.5%

Div₁ = P₀ x (Re - g)

Div₁ = $90 x (9% - 4.5%) = $90 x 4.5% = $4.05

now the current dividend (Div₀) = Div₁ / (1 + Re) = $4.05 / (1 + 9%) = $4.05 / 1.09 = $3.7156 = $3.72

7 0
2 years ago
Eric randomly surveyed 150 adults from a certain city and asked which team in a contest they were rooting​ for, either north hig
max2010maxim [7]
Interval at 95% confidence = p+/- Z sqrt (p(1-p)/n)
Upper interval => 0.68=p+1.96 sqrt (p(1-p)/n)
Lower interval => 0.52=p-1.96 sqrt (p(1-p)/n)
Putting sqrt term to be "q"

0.68=p+1.96q
0.52=p-1.96q

Adding the two equations to solve for p (proportion of 150 adults rootng for North high school);
1.2 = 2p => p=0.6
6 0
3 years ago
Read 2 more answers
Product safety has become a hot topic for businesses around the world. The purpose of product safety policies and legislation is
Sav [38]

Answer:

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Explanation:

6 0
2 years ago
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