McCann Publishing has a target capital structure of 35% debt and 65% equity.This year's capital budget is $850,000 and it wants
to pay a dividend of $400,000.If the company follows a residual dividend policy,how much net income must it earn to meet its capital budgeting requirements and pay the dividend,all while keeping its capital structure in balance?A) $904,875B) $952,500C) $1,000,125D) $1,050,131E) $1,102,638
Calculation for how much net income must it earn to meet its capital budgeting requirements and pay the dividend
Using this formula
Net income = Dividends + (Capital budget ×Equity)
Let plug in the formula
Net Income=$400,000+($850,000×65%)
Net Income=$400,000+$552,500
Net Income=$952,500
Therefore how much net income must it earn to meet its capital budgeting requirements and pay the dividend dividend,all while keeping its capital structure in balance is $952,500
By definition, a mortgage is loan that is used to purchase a property. The financial institutions can are designed to offer low interest rates on residential mortgages are commercial banks and loan associations. They often lead against the one-to-four family mortgages.
Planning is a key fundamental management function. It is deciding beforehand how are you going to achieve the objectives previously determined. Planning is deciding what needs to be done, when, who and how.
In this case, Amanda set the targets of the salesperson in order to achieve the organizational goals. By planning the sales required, she believes it will take her a step closer to the goals of the period.
