All Related Questions of Dividend Payout Ratio

Q: Bulla Recording, Inc., wishes to maintain a growth rate of

Bulla Recording, Inc., wishes to maintain a growth rate of 12 percent per year and a debt–equity ratio of .40. Profit margin is 5.3 percent, and the ratio of total assets to sales is constant at .75....

Q: The most recent financial statements for Fontenot Co. are shown here

The most recent financial statements for Fontenot Co. are shown here: Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant deb...

Q: Austin Grocers recently reported the following 2008 income statement (in millions of

Austin Grocers recently reported the following 2008 income statement (in millions of dollars): This year the company is forecasting a 25% increase in sales; and it expects that its year-end operating...

Q: Ballack Co.’s common stock currently sells for $46.

Ballack Co.’s common stock currently sells for $46.75 per share. The growth rate is a constant 12%, and the company has an expected dividend yield of 5%. The expected long-run dividend payout ratio is...

Q: Wingler Communications Corporation (WCC) produces premium stereo headphones that sell

Wingler Communications Corporation (WCC) produces premium stereo headphones that sell for $28.80 per set, and this year’s sales are expected to be 450,000 units. Variable production costs for the expe...

Q: Suppose a firm makes the following policy changes. If the change

Suppose a firm makes the following policy changes. If the change means that external non spontaneous financial requirements (AFN) will increase, indicate this with a (+); indicate a decrease with a (&...

Q: Bowles Sporting Inc. is prepared to report the following income statement

Bowles Sporting Inc. is prepared to report the following income statement (shown in thousands of dollars) for the year 2009. Prior to reporting this income statement, the company wants to determine i...

Q: How would each of the following scenarios affect a firm’s cost of

How would each of the following scenarios affect a firm’s cost of debt, rd(1 – T); its cost of equity, rs; and its WACC? Indicate with a plus (+), a minus (â&...

Q: Use a spreadsheet model to forecast the financial statements in Problems 17

Use a spreadsheet model to forecast the financial statements in Problems 17-13 and 17-14. Data from Problem 17-13 Morrissey Technologies Inc.’s 2008 financial statements are shown h...

Q: Morrissey Technologies Inc.’s 2008 financial statements are shown here.

Morrissey Technologies Inc.’s 2008 financial statements are shown here. Suppose that in 2009, sales increase by 10% over 2008 sales. The firm currently has 100,000 shares outstandi...

Q: Colgate-Palmolive Company has just paid an annual dividend of $

Colgate-Palmolive Company has just paid an annual dividend of $0.96. Analysts are predicting an 11% per year growth rate in earnings over the next five years. After then, Colgate’s earnings are expect...

Q: Assume that an average firm in the office supply business has a

Assume that an average firm in the office supply business has a 6% profit margin, a 40% debt/assets ratio, a total assets turnover of 2 times, and a dividend payout ratio of 40%. Is it true that if su...

Q: Owen's Electronics has 9 operating plants in seven southwestern states. Sales

Owen's Electronics has 9 operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous y...

Q: Conn Man's Shops, Inc., a national clothing chain, had

Conn Man's Shops, Inc., a national clothing chain, had sales of $300 million last year. The business has a steady net profit margin of 8 percent and a dividend payout ratio of 25 percent. The balance...

Q: You are considering investing in Annie’s Eatery. You have been able

You are considering investing in Annie’s Eatery. You have been able to locate the following information on the firm: Total assets are $40 million, accounts receivable are $6.0 million, ACP is 30 days,...

Q: You have located the following information on Webb’s Heating & Air Conditioning

You have located the following information on Webb’s Heating & Air Conditioning: debt ratio is 54 percent, capital intensity ratio is 1.10 times, profit margin is 12.5 percent, and dividend payout rat...

Q: Last year, Lakesha’s Lounge Furniture Corporation had an ROA of 7

Last year, Lakesha’s Lounge Furniture Corporation had an ROA of 7.5 percent and a dividend payout ratio of 25 percent. What is the internal growth rate?

Q: Last year, Lakesha’s Lounge Furniture Corporation had an ROE of 17

Last year, Lakesha’s Lounge Furniture Corporation had an ROE of 17.5 percent and a dividend payout ratio of 20 percent. What is the sustainable growth rate?

Q: The financial statements of Eagle Sport Supply are shown in Table 29

The financial statements of Eagle Sport Supply are shown in Table 29.18. For simplicity, “Costs” include interest. Assume that Eagle’s...

Q: a. What is the internal growth rate of Eagle Sport (

a. What is the internal growth rate of Eagle Sport (see Problem 24) if the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at two-thirds? b. What is the sustainable growth...

Q: Let’s look at Dick’s Sporting Goods (Dick’s) one last time

Let’s look at Dick’s Sporting Goods (Dick’s) one last time. Think about Dick’s and how everything you’ve learned comes together. Think about accountants reporting what Dick’s has, where it got its mon...

Q: Suppose you just bought a convertible bond at its par value.

Suppose you just bought a convertible bond at its par value. Your broker gives you information on the bond’s conversion ratio, coupon rate, maturity, years of call protection, and the yield on nonconv...

Q: Presented here are summarized data from the balance sheets and income statements

Presented here are summarized data from the balance sheets and income statements of Wiper, Inc.: Required: a. Calculate return on investment, based on net income and average total assets, for 2011 a...

Q: The commercial loan officers did not list the dividend payout ratio as

The commercial loan officers did not list the dividend payout ratio as a highly significant ratio, but they did indicate that the dividend payout ratio appeared frequently in loan agreements. Speculat...

Q: McCormac Co. wishes to maintain a growth rate of 12 percent

McCormac Co. wishes to maintain a growth rate of 12 percent a year, a debt–equity ratio of 1.20, and a dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at .75. What...

Q: A firm wishes to maintain a growth rate of 11.5

A firm wishes to maintain a growth rate of 11.5 percent and a dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at .60, and profit margin is 6.2 percent. If the firm...

Q: A firm wishes to maintain an internal growth rate of 7 percent

A firm wishes to maintain an internal growth rate of 7 percent and a dividend payout ratio of 25 percent. The current profit margin is 5 percent, and the firm uses no external financing sources. What...

Q: Nearside, Inc., wishes to maintain a growth rate of 12

Nearside, Inc., wishes to maintain a growth rate of 12 percent per year and a debt–equity ratio of .30. Profit margin is 6.70 percent, and the ratio of total assets to sales is constant at 1.35. Is th...

Q: The most recent financial statements for Throwing Copper Co. are shown

The most recent financial statements for Throwing Copper Co. are shown here: Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a const...

Q: Consider the following income statement for the Heir Jordan Corporation:

Consider the following income statement for the Heir Jordan Corporation: A 20 percent growth rate in sales is projected. Prepare a pro forma income statement assuming costs vary with sales and the d...

Q: Assume that you have been given the responsibility to invest some funds

Assume that you have been given the responsibility to invest some funds in the stock market to provide an annuity to an individual who has just retired. Explain how you might use the dividend yield an...

Q: Electronic Timing, Inc. (ETI), is a small company

Electronic Timing, Inc. (ETI), is a small company founded 15 years ago by electronics engineers Tom Miller and Jessica Kerr. ETI manufactures integrated circuits to capitalize on the complex mixed-sig...

Q: Refer to the financial statements and other data in Problem 14–

Refer to the financial statements and other data in Problem 14–12A. Assume that you are an account executive for a large brokerage house and that one of your clients has asked for a...

Q: You have just been hired as a loan officer at Slippery Rock

You have just been hired as a loan officer at Slippery Rock State Bank. Your supervisor has given you a file containing a request from Lydex Company, a manufacturer of safety helmets, for a $3,000,000...

Q: In the right-hand column below, certain financial ratios are

In the right-hand column below, certain financial ratios are listed. To the left of each ratio is a business transaction or event relating to the operating activities of Delta Company (each transactio...

Q: Paul Ward is interested in the stock of Pecunious Products, Inc

Paul Ward is interested in the stock of Pecunious Products, Inc. Before purchasing the stock, Mr. Ward would like your help in analyzing the data that are available to him as follows: Mr. Ward would...

Q: Suppose a firm makes the policy changes listed below. If

Suppose a firm makes the policy changes listed below. If a change means that external, nonspontaneous financial requirements (AFN) will increase, indicate this by a (+); indicate a decrease by a (()(...

Q: The Wei Corporation expects next year’s net income to be $15

The Wei Corporation expects next year’s net income to be $15 million. The firm’s debt ratio is currently 40%. Wei has $12 million of profitable investment opportunities, and it wishes to maintain its...

Q: Upton Computers makes bulk purchases of small computers, stocks them in

Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set...

Q: As your first week at Henley Manufacturing Inc. draws to a

As your first week at Henley Manufacturing Inc. draws to a close, you find a memorandum on your desk from the company’s CEO. The memo outlines sales and earnings goals for next year: Sales are expecte...

Q: Shinedown, Inc., wishes to maintain a growth rate of 12 

Shinedown, Inc., wishes to maintain a growth rate of 12 percent per year and a debt–equity ratio of .35. Profit margin is 4.9 percent, and the ratio of total assets to sales is constant at .75. Is thi...

Q: The most recent financial statements for Wise Co. are shown here

The most recent financial statements for Wise Co. are shown here: Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt&aci...

Q: What is the value of an all-equity firm that:

What is the value of an all-equity firm that: a. has a dividend payout ratio of 100 percent b. is expected to generate net income each year (forever) of $1 million, and c. has a required equity return...

Q: Pecunious Products, Inc.’s financial results for the past three

Pecunious Products, Inc.’s financial results for the past three years are summarized below: Your boss has asked you to review these results and then answer the following questions:...

Q: Markus Company’s common stock sold for $2.75 per share

Markus Company’s common stock sold for $2.75 per share at the end of this year. The company paid a common stock dividend of $0.55 per share this year. It also provided the following...

Q: Handy and Harman, a leading fabricator of precious metal alloys,

Handy and Harman, a leading fabricator of precious metal alloys, pays out only 23% of its earnings as dividends. The average dividend payout ratio for metal fabricating firms is 45%. The average growt...

Q: The following regression was run using all NYSE firms in 1995

The following regression was run using all NYSE firms in 1995 YIELD = 0.0478 − 0.0157 BETA + 0.0000008 MKTCAP + 0.006797 DBTRATIO + 0.0002 ROE − 0.09 NCEX∕TA R 2 = 12.88% Where BET...

Q: Walmart makes significant investments in operating capacity, primarily via investments in

Walmart makes significant investments in operating capacity, primarily via investments in property, plant, and equipment, but also via investments in wholly and partially owned subsidiaries. Walmart a...

Q: Final earnings estimates for Chilean Health Spa & Fitness Center have been

Final earnings estimates for Chilean Health Spa & Fitness Center have been prepared for the CFO of the company and are shown in the following table. The firm has 7,500,000 shares of common stock outst...

Q: Divac Company has developed a statement of stockholders’ equity for the year

Divac Company has developed a statement of stockholders’ equity for the year 2017 as follows: Divac’s preferred stock is $100 par, 8% stock. If the stock is liqui...

Q: Assume an investor uses the constant-growth DVM to value a

Assume an investor uses the constant-growth DVM to value a stock. Listed below are various situations that could affect the computed value of a stock. Look at each one of these individually and indica...

Q: Wally Wilson is a commercial artist who makes a good living by

Wally Wilson is a commercial artist who makes a good living by doing freelance work—mostly layouts and illustrations—for local ad agencies and major institutional c...

Q: Find the EPS, P/E ratio, and dividend yield

Find the EPS, P/E ratio, and dividend yield of a company that has five million shares of common stock outstanding (the shares trade in the market at $25), earns 10% after taxes on annual sales of $150...

Q: The Amherst Company has net profits of $10 million, sales

The Amherst Company has net profits of $10 million, sales of $150 million, and 2.5 million shares of common stock outstanding. The company has total assets of $75 million and total stockholders’ equit...

Q: The MedTech Company recently reported net profits after taxes of $15

The MedTech Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million per year. a. Compute th...

Q: Consolidated Software doesn’t currently pay any dividends but is expected to start

Consolidated Software doesn’t currently pay any dividends but is expected to start doing so in four years. That is, Consolidated will go three more years without paying dividends and then is expected...

Q: Good stuff Corporation has total equity of $500 million and 100

Good stuff Corporation has total equity of $500 million and 100 million shares outstanding. Its ROE is 15%. The dividend payout ratio is 33.3%. Calculate the company’s dividends per share (round to th...

Q: The following is ABC Inc.’s balance sheet (in thousands

The following is ABC Inc.’s balance sheet (in thousands): Also, sales equal $500, cost of goods sold equals $360, interest payments equal $62, taxes equal $56, and net income equal...

Q: Calculate the following ratios for Lake of Egypt Marina Inc. as

Calculate the following ratios for Lake of Egypt Marina Inc. as of year-end 2019. Using these ratios for Lake of Egypt Marina Inc. and the industry, what can you conclude about Lake of Egypt Marina&...

Q: Tomey Supply Company’s financial statements for the most recent fiscal year are

Tomey Supply Company’s financial statements for the most recent fiscal year are shown below. The company management projects that sales will increase by 20 percent next year. Assume...

Q: Rowan Company has a net profit margin of 8.3 percent

Rowan Company has a net profit margin of 8.3 percent, debt ratio of 45 percent, total assets of $4,157,550, and sales of $6,852,654. If the company has a dividend payout ratio of 67 percent, what is i...

Q: Refer to the information for Rowan Company in Problem 19.23

Refer to the information for Rowan Company in Problem 19.23. The firm’s management desires a sustainable growth rate (SGR) of 10 percent but does not wish to change the company’s level of debt or its...

Q: Rocky Sales, Inc., has current sales of $1,

Rocky Sales, Inc., has current sales of $1,215,326 and net income of $211,253. It also has a debt ratio of 25 percent and a dividend payout ratio of 75 percent. The company’s total assets are $712,455...

Q: Ellicott Textile Mills management has reported the following financial information for the

Ellicott Textile Mills management has reported the following financial information for the year ended September 30, 2017. The company generated a net income of $915, 366 on a net profit margin of 6.4...

Q: Maryland Micro Brewers generated revenues of $12,125,800

Maryland Micro Brewers generated revenues of $12,125,800 with a 72 percent capital intensity ratio during the year ended September 30, 2017. Its net income was $873,058. With the introduction of a hal...

Q: Munson Communications Company has just reported earnings for the year ended June

Munson Communications Company has just reported earnings for the year ended June 30, 2017. Below are the firm’s income statement and balance sheet. The company had a 55 percent divid...

Q: Goodwin Corp. has revenues of $12,112,659

Goodwin Corp. has revenues of $12,112,659, costs of $9,080,545, interest payments of $412,375, and a tax rate of 34 percent. It paid dividends of $1,025,000 to its stockholders. What are the firm’s di...

Q: Northwood Corp. has a dividend payout ratio of 60 percent,

Northwood Corp. has a dividend payout ratio of 60 percent, return on equity of 14.5 percent, total assets of $11,500,450, and equity of $4,652,125. Calculate the firm’s internal rate of growth (IGR)?...

Q: Renewal Company has net income of $1.25 million and

Renewal Company has net income of $1.25 million and a dividend payout ratio of 35 percent. It currently has equity of $2,875,223. What is the firm’s sustainable growth rate?

Q: If Newell Corp. has a ROE of 13.7 percent

If Newell Corp. has a ROE of 13.7 percent and a dividend payout ratio of 32 percent, what is its sustainable growth rate?

Q: Fantasy Travel Company has a return on equity of 17.5

Fantasy Travel Company has a return on equity of 17.5 percent, a total equity/total assets ratio of 65 percent, and a dividend payout ratio of 75 percent. What is the company’s internal growth rate?

Q: How does the dividend payout ratio affect the amount of funds needed

How does the dividend payout ratio affect the amount of funds needed to finance growth?

Q: Mondrian plc is a new business that aims to maximize the wealth

Mondrian plc is a new business that aims to maximize the wealth of its shareholders. The board of directors is currently trying to decide upon the most appropriate dividend policy to adopt for the bus...

Q: Ji Wu of Troy, New York, has $5,

Ji Wu of Troy, New York, has $5,000 that he wants to invest in the stock market. Ji is in college on a scholarship and does not plan to use the $5,000 or any dividend income for another five years, wh...

Q: Sig, Inc., wishes to maintain a growth rate of 12

Sig, Inc., wishes to maintain a growth rate of 12 percent per year and a debt-equity ratio of .43. The profit margin is 5.9 percent, and the ratio of total assets to sales is constant at 1.80. Is this...

Q: The most recent financial statements for Alexander Co. are shown

The most recent financial statements for Alexander Co. are shown here:Assets and costs are proportional to sales. The company maintains a constant 40 percent dividend payout ratio and a constant debt-...

Q: Consider the following income statement for the Heir Jordan Corporation:

Consider the following income statement for the Heir Jordan Corporation:A 20 percent growth rate in sales is projected. Prepare a pro forma income statement assuming costs vary with sales and the divi...

Q: From the previous two questions, prepare a pro forma balance

From the previous two questions, prepare a pro forma balance sheet showing EFN, assuming an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio.Data...

Q: Ramble On Co. wishes to maintain a growth rate of

Ramble On Co. wishes to maintain a growth rate of 12 percent per year, a debt-equity ratio of .90, and a dividend payout ratio of 25 percent. The ratio of total assets to sales is constant at 0.85. Wh...

Q: A firm wishes to maintain an internal growth rate of

A firm wishes to maintain an internal growth rate of 7.1 percent and a dividend payout ratio of 25 percent. The current profit margin is 6.5 percent, and the firm uses no external financing sources. W...

Q: From the previous two questions, prepare a pro forma balance

From the previous two questions, prepare a pro forma balance sheet showing EFN, assuming an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio.Data...

Q: Ramble On Co. wishes to maintain a growth rate of

Ramble On Co. wishes to maintain a growth rate of 12 percent per year, a debt-equity ratio of .90, and a dividend payout ratio of 25 percent. The ratio of total assets to sales is constant at 0.85. Wh...

Q: A firm wishes to maintain an internal growth rate of

A firm wishes to maintain an internal growth rate of 7.1 percent and a dividend payout ratio of 25 percent. The current profit margin is 6.5 percent, and the firm uses no external financing sources. W...

Q: Modern Furniture Company had finally arrived at the point where it had

Modern Furniture Company had finally arrived at the point where it had a sufficient excess cash flow of $4.8 million to consider paying a dividend. It had 3 million shares of stock outstanding and was...

Q: Business has been good for Keystone Control Systems, as indicated by

Business has been good for Keystone Control Systems, as indicated by the four-year growth in earnings per share. The earnings have grown from $1.00 to $1.63. a. Use Appendix A at the back of the text...

Q: Owen’s Electronics has nine operating plants in seven Southwestern states. Sales

Owen’s Electronics has nine operating plants in seven Southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales...

Q: Conn Man’s Shops, a national clothing chain, had sales of

Conn Man’s Shops, a national clothing chain, had sales of $350 million last year. The business has a steady net profit margin of 9 percent and a dividend payout ratio of 25 percent....

Q: The firm ’ s dividend payout ratio is 30 percent. What

The firm ’ s dividend payout ratio is 30 percent. What was the firm ’ s year 2 net income?

Q: A firm had retained earnings of $18,000 at

A firm had retained earnings of $18,000 at the beginning of the year. Its net income for the year was $14,300, and its dividend payout ratio is 30 percent. What are its retained earnings at the end o...

Q: Use the average dividend payout ratio from years 1 and 2,

Use the average dividend payout ratio from years 1 and 2, and the forecast net income figure from Practice Problem 29, to estimate the total amount of dividends that will be paid by the company in yea...

Q: Apex Corporation is considering the purchase of Pinnacle Company in a stockfor

Apex Corporation is considering the purchase of Pinnacle Company in a stockfor-stock exchange. Selected data on the two companies are shown in the following table: Assume that there are no synergist...

Q: Apex Financial Ltd. is concerned about the impact of errors in

Apex Financial Ltd. is concerned about the impact of errors in its estimates of the future dividend payout ratio for Barnett Steel Corporation. Assume that the current dividend is $1, ROE is fixed at...

Q: Selkirk Inc. has an expected profit margin of 10 percent,

Selkirk Inc. has an expected profit margin of 10 percent, turnover ratio of 1.8, and a leverage ratio of 0.3. The leading EPS is $2.50 and the firm uses a dividend payout ratio of 35 percent. The requ...

Q: ToolWerks Company is expected to earn $12 million next year.

ToolWerks Company is expected to earn $12 million next year. There are 4 million shares outstanding and the company uses a dividend payout ratio of 30 percent. The required rate of return for companie...

Q: Parker Imports Ltd. is expected to pay a $2 dividend

Parker Imports Ltd. is expected to pay a $2 dividend in one year. The required rate of return is 9 percent. The firm uses a dividend payout ratio of 25 percent. Calculate the leading P/E ratio in the...

Q: Upton Computers makes bulk purchases of small computers, stocks the min

Upton Computers makes bulk purchases of small computers, stocks the min conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set...

Q: Calculate the cash dividend paid per share for each of the firms

Calculate the cash dividend paid per share for each of the firms in the following table using their earnings per share and dividend payout ratio:

Q: The Welmar Corporation operates membership warehouses that offer a wide variety of

The Welmar Corporation operates membership warehouses that offer a wide variety of branded and private-label products in no-frills, self-service warehouse facilities. In 2016, the company paid total c...

Q: Solarpower Systems expects to earn $20 per share this year and

Solarpower Systems expects to earn $20 per share this year and intends to pay out $8 in dividends to shareholders and retain $12 to invest in new projects with an expected return on equity of 20 perce...

Q: The dividend payout ratio equals dividends paid divided by earnings. How

The dividend payout ratio equals dividends paid divided by earnings. How would you expect this ratio to behave during a recession? What about during an economic boom?

Q: As president of Young’s of California, a large clothing chain,

As president of Young’s of California, a large clothing chain, you have just received a letter from a major stockholder. The stockholder asks about the company’s dividend policy. In fact, the stockhol...

Q: Upton Computers makes bulk purchases of small computers, stocks them in

Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set...

Q: Comparative statement of financial position accounts of Jensen Limited, which follows

Comparative statement of financial position accounts of Jensen Limited, which follows IFRS, appear below: Data from Jensen’s 2017 income statement follow: Additional information:...

Q: Guas Inc., a major retailer of bicycles and accessories, operates

Guas Inc., a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The company is currently preparing its statement of cash flows. The comparative state...

Q: If a management team wishes to boost the company's stock price,

If a management team wishes to boost the company's stock price, then it should consider actions to a. increase the S/Q rating on the company branded footwear, spend additional money on corporate citi...

Q: Managerial efforts to boost a company's stock price should entail such actions

Managerial efforts to boost a company's stock price should entail such actions as a. spending amounts on corporate citizenship and social responsibility that are above the industry average boosting th...

Q: If a management team wishes to boost the company's stock price,

If a management team wishes to boost the company's stock price, then it should consider pursuing actions to meet or beat the annual investor-expected EPS targets, raising the company's a. dividend ea...

Q: Harrison Hardware anticipates $2 million in net income next year and

Harrison Hardware anticipates $2 million in net income next year and a 20% participation in the firm’s dividend reinvestment plan. Management expects to spend $2.375 million on new capital projects,...

Q: The Argo Pamphlet Company’s dividend payout ratio is 35%. It is

The Argo Pamphlet Company’s dividend payout ratio is 35%. It is currently paying an annual dividend of $1.30. a. What is Argo’s EPS? b. What is the market price of Argo’s stock if its P/E ratio is 14...

Q: Fleming, Inc. had a dividend payout ratio of 25%

Fleming, Inc. had a dividend payout ratio of 25% this year that resulted in a payout of $80,000 in dividends. Return on sales (ROS) was 8% this year and is expected to increase to 9% next year. If F...

Q: Broxholme Industries has sales of $40 million, equity totaling $

Broxholme Industries has sales of $40 million, equity totaling $27.5 million and an ROS of 12%. The sustainable growth rate has been calculated at 10.9%. What dividend payout ratio was assumed in this...

Q: Comparative SFP accounts of Jensen Limited, which follows IFRS, appear

Comparative SFP accounts of Jensen Limited, which follows IFRS, appear below: Data from Jensen's 2020 income statement follow: Additional information: 1. Equipment that cost $10,000 and was 40% dep...

Q: Guas Inc., a major retailer of bicycles and accessories, operates

Guas Inc., a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The company is currently preparing its statement of cash flows. The comparative state...

Q: Let’s look at Dick’s Sporting Goods (Dick’s) one last time

Let’s look at Dick’s Sporting Goods (Dick’s) one last time. Think about Dick’s and how everything you’ve learned comes together. Think about accountants reporting what Dick’s has, where it got its mon...

Q: From the previous two questions, prepare a pro forma balance sheet

From the previous two questions, prepare a pro forma balance sheet showing EFN, assuming an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio. Pro...

Q: Gamgee Co. wishes to maintain a growth rate of 11 percent

Gamgee Co. wishes to maintain a growth rate of 11 percent per year, a debt-equity ratio of .75, and a dividend payout ratio of 25 percent. The ratio of total assets to sales is constant at .65. What p...

Q: A firm wishes to maintain an internal growth rate of 6.

A firm wishes to maintain an internal growth rate of 6.4 percent and a dividend payout ratio of 25 percent. The current profit margin is 5.7 percent, and the firm uses no external financing sources. W...

Q: Tinsley, Inc., wishes to maintain a growth rate of 12

Tinsley, Inc., wishes to maintain a growth rate of 12 percent per year and a debt-equity ratio of .55. The profit margin is 6.2 percent, and the ratio of total assets to sales is constant at 1.05. Is...

Q: The most recent financial statements for Tran Co. are shown here

The most recent financial statements for Tran Co. are shown here: Assets and costs are proportional to sales. The company maintains a constant 40 percent dividend payout ratio and a constant debt-eq...

Q: Consider the following income statement for the Heir Jordan Corporation:

Consider the following income statement for the Heir Jordan Corporation: A 20 percent growth rate in sales is projected. Prepare a pro forma income statement assuming costs vary with sales and the d...

Q: The stock of Nogro Corporation is currently selling for $10 per

The stock of Nogro Corporation is currently selling for $10 per share. Earnings per share in the coming year are expected to be $2. The company has a policy of paying out 50% of its earnings each year...

Q: Chiptech, Inc., is an established computer chip firm with several

Chiptech, Inc., is an established computer chip firm with several profitable existing products as well as some promising new products in development. The company earned $1 a share last year, and just...

Q: a. What is the internal growth rate of Eagle Sport (

a. What is the internal growth rate of Eagle Sport (see Problem 25) if the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed at two-thirds? b. What is the sustainable growth...

Q: The financial statements of Eagle Sport Supply are shown in Table 29

The financial statements of Eagle Sport Supply are shown in Table 29.17. For simplicity, “Costs” include interest. Assume that Eagle’s assets are proportional to its sales. a. Find Eagle’s required ex...

Q: In the Data Analytics Cases in the previous chapter, you used

In the Data Analytics Cases in the previous chapter, you used Tableau to examine two (hypothetical) publicly traded companies: GPS Corporation and Tru, Inc. regarding the return on stockholders’ equit...

Q: While eating his Kellogg’s Frosted Flakes one January morning, Tony noticed

While eating his Kellogg’s Frosted Flakes one January morning, Tony noticed the following article in his local paper: Kellogg Company Reports Fourth-Quarter 2017 Results and Provides Guidance For 2018...

Q: The stock of Nogro Corporation is currently selling for $10 per

The stock of Nogro Corporation is currently selling for $10 per share. Earnings per share in the coming year are expected to be $2. The company has a policy of paying out 50% of its earnings each year...

Q: Chiptech, Inc., is an established computer chip firm with several

Chiptech, Inc., is an established computer chip firm with several profitable existing products as well as some promising new products in development. The company earned $1 per share last year and just...

Q: Use the DuPont system and the following data to find return on

Use the DuPont system and the following data to find return on equity. Leverage ratio 2.2 Total asset turnover 2.0 Net profit margin 5.5% Dividend payout ratio 31.8%

Q: Financial information for American Eagle is presented in Appendix A at the

Financial information for American Eagle is presented in Appendix A at the end of the book, and financial information for Buckle is presented in Appendix B at the end of the book. Required: 1. Determi...

Q: 1. A share dividend involves the distribution of which of the

1. A share dividend involves the distribution of which of the following items: a. Shares of the company’s stock without receiving any payment in return b. Income of the company based on the amount dec...

Q: Ndovu plc is considering investing in a new project and, in

Ndovu plc is considering investing in a new project and, in the past, it would have used a cost of capital of 10 per cent as the discount rate to assess new projects. This rate had been calculated by...

Q: While eating his Kellogg’s Frosted Flakes one February morning, Tony noticed

While eating his Kellogg’s Frosted Flakes one February morning, Tony noticed the following notification on his iPhone: A quick click revealed reported earnings per share of $0.59 and...

Q: Walmart makes significant investments in operating capacity, primarily via investments in

Walmart makes significant investments in operating capacity, primarily via investments in property, plant, and equipment, but also via investments in wholly and partially owned subsidiaries. Walmart a...

Q: The Longmire Company recently reported net profits after taxes of $35

The Longmire Company recently reported net profits after taxes of $35.8 million. It has 3.5 million shares of common stock outstanding and pays preferred dividends of $2 million per year. a. Compute t...

Q: Find the EPS, P/E ratio, and dividend yield

Find the EPS, P/E ratio, and dividend yield of a company that has five million shares of common stock outstanding (the shares trade in the market at $25), earns 10% after taxes on annual sales of $150...

Q: The Anderson Company has net profits of $20 million, sales

The Anderson Company has net profits of $20 million, sales of $250 million, and 4.5 million shares of common stock outstanding. The company has total assets of $175 million and total stockholders’ equ...

Q: Captured Photographs doesn’t currently pay any dividends but is expected to start

Captured Photographs doesn’t currently pay any dividends but is expected to start doing so in four years. That is, Captured Photographs will go three more years without paying dividends and then is ex...

Q: Jensen Inc. has total equity of $73 billion and 675

Jensen Inc. has total equity of $73 billion and 675 million shares outstanding. Its ROE is 12.7%. The dividend payout ratio is 21%. Calculate the company’s dividends per share (round to the nearest pe...

Q: Assume an investor uses the constant-growth DVM to value a

Assume an investor uses the constant-growth DVM to value a stock. Listed are various situations that could affect the computed value of a stock. Look at each one of these individually and indicate whe...

Q: Financial information for American Eagle and financial information for Buckle is presented

Financial information for American Eagle and financial information for Buckle is presented. Required: 1. Determine which company maintains a higher ratio of current assets to total assets. How might t...

Q: The following information was available for the year ended December 31,

The following information was available for the year ended December 31, 2022: Required: a. Calculate the price/earnings ratio for 2022. b. Calculate the dividend payout ratio for 2022. c. Calculate th...

Q: Presented here are summarized data from the balance sheets and income statements

Presented here are summarized data from the balance sheets and income statements of Wiper Inc.: Required: a. Calculate return on investment, based on net income and average total assets, for 2023 and...

Q: Alberton Inc., an all-equity-financed equipment manufacturer,

Alberton Inc., an all-equity-financed equipment manufacturer, has announced that it will change its capital structure to one that will have 30 percent of debt, using the proceeds from the debt issue t...