policy of paying out cash dividends

FarmCo, Inc. follows a policy of paying out cash dividends equal to the residual amount that remains after

funding 30 percent of its planned capital expenditures. The firm tries to maintain a 30 percent debt and 70 percent equity capital structure and does not plan on issuing more stock in the coming year.​ FarmCo’s CFO has estimated that the firm will earn $ 17 million in the current year.

Don't use plagiarized sources. Get Your Custom Essay on
policy of paying out cash dividends
Just from $13/Page
Order Essay

a. If the firm maintains its target financing mix and does not issue any equity next​ year, what is the most it could spend on capital expenditures next year given its earnings​ estimate?

b. If​ FarmCo’s capital budget for next year is $ 14 ​million, how much will the firm pay in dividends and what is the resulting dividend payout​ percentage?

Calculate your order
Pages (275 words)
Standard price: $0.00
Client Reviews
Our Guarantees
100% Confidentiality
Information about customers is confidential and never disclosed to third parties.
Original Writing
We complete all papers from scratch. You can get a plagiarism report.
Timely Delivery
No missed deadlines – 97% of assignments are completed in time.
Money Back
If you're confident that a writer didn't follow your order details, ask for a refund.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
Power up Your Academic Success with the
Team of Professionals. We’ve Got Your Back.
Power up Your Study Success with Experts We’ve Got Your Back.
error: Content is protected !!
Live Chat+1(978) 822-0999EmailWhatsApp

Order your essay today and save 20% with the discount code GOODESSAY