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Katarina [22]
3 years ago
12

After earning $50 million in net income, Marshall Manufacturing distributed $15 million in dividends to their stockholders. Mars

hall's board of directors decided to invest the remaining $35 million back into the business. This $35 million reinvestment of profits represents:
a. a trust fund earningb. retained earningsc. preferred capitald. mutual funds
Business
1 answer:
slavikrds [6]3 years ago
6 0

Answer:

The correct answer is letter "B": retained earnings.

Explanation:

Retained earnings are the portion of the companies net earnings that it does not payout to shareholders as dividends. The company keeps this money and reinvests it in the business or uses it to pay out part of the company's debt. The retained earnings are reported in the Balance Sheet in the section of shareholder's equity. The formula to calculate the retained earnings is:

RE = Net Income (or Loss) − C − S

where:

  • C=Cash dividends
  • S=Stock dividends
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The Evanec Company's next expected dividend, D1, is $3.03; its growth rate is 5%; and its common stock now sells for $34.00. New
Anestetic [448]

Answer:

(a) 14%

(b) 15%

(c) 15.48%

Explanation:

cost of retained earnings:

= ($3.03 ÷ $34) + 0.05

= 0.09 + 0.05

= 14%

Therefore, the Evanec's cost of retained earnings is 14%

Flotation cost percentage:

= [($34 - $28.90) ÷ $34] × 100

= 0.15 × 100

= 15%

Therefore, the Evanec's percentage flotation cost is 15%.

Cost of new common stock:

= ($3.03 ÷ $28.90) + 0.05

= 0.1048 + 0.05

= 15.48%

Therefore, the Evanec's cost of new common stock is 15.48%.

8 0
3 years ago
Roger is almost done with his feasibility study and is concerned about the financing. Up until this point, he has been operating
Andrews [41]

Answer:

True

Explanation:

Hope this helps.

8 0
2 years ago
Real estate is a great investment for everyone, particularly since the money is more liquid than common stocks.
sveta [45]
This answer is FALSE - FUN FACT - Liquidity of money refers to the ease with which the owner of an asset can convert it into cash it is easier to convert common stocks into cash rather than attempt to raise cash from sale or mortgage of real estate assets
5 0
3 years ago
Read 2 more answers
Which of these statements about pipeline inventory is best? A. Changing an item's lot size does not directly affect the average
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Answer: Changing an item's lot size does not directly affect the average level of the pipeline inventory.

6 0
2 years ago
Tim and Tammy are updating their financial plan and are concerned that they might not have enough life insurance coverage for th
julsineya [31]

Answer:

$274,400

Explanation:

Data provided in the question:

Annual income of Tim and Tammy = $56,000

Net worth of Tim and Tammy = $150,000

Now,

Using the easy method

Step 1;

Multiply the annual gross income by 70%

⇒ $56,000 × 0.70

⇒ $39,200

Step 2 :

Multiply the above result with 7

⇒ $39,200 × 7

⇒ $274,400

therefore,

we get the amount of life insurance as $274,400

8 0
3 years ago
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