(Answered) Question limeade corporation a large soft drink

Finance

Question: LimeAde Corporation, a large soft drink manufacturing firm, is faced with the decision of how much to pay out as dividends to its stockholders. It expects to have a net income of $ 1000 (after depreciation of $500), and it has the following projects:

The firm's beta is 1.5 and the current risk-free rate is 6%. The firm plans to finance net capital expenditures (cap ex -depreciation) and working capital with 20% debt. The firm also has current revenues of $5000, which it expects to grow at 8 %. Working capital will be maintained at 25% of revenues. How much should the firm return to its stockholders as a dividend?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92498987
Price:- $15

Verified Expert

Priced at $30 Now at $15, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Basic Finance

What is the difference between risk and uncertainty and

What is the difference between risk and uncertainty and what are the methods of risk management?

What is marketing discipline what is most peoples

What is marketing discipline? What is most people's perception of marketing discipline? Name an organization that has done a great job marketing. What did they do to make you feel this way?

To hedge a short share position one can short the put

To hedge a short share position, one can short the put option on the share. • What is the investor's intention in selling the put option? • What does the strike indicate when the trader has zero risk tolerance? • Under w ...

Suppose a firm pays total dividends of 1100000 out of net

Suppose a firm pays total dividends of $1,100,000 out of net income of $5.5 million. What would the firm's payout ratio be? (Round your answer to 2 decimal places.)

Question - wald incs stock has a required rate of return of

Question - Wald Inc's stock has a required rate of return of 10 and it sells for 40 per share Wald's dividend is expected to grow at a constant rate of 7 per year. What is the expected year-end dividend D1?

Please show formula and explanationyou have decided to

Please show formula and explanation You have decided to place $553 in equal deposits every month at the beginning of the month into a savings account earning 10.62 percent per year, compounded monthly for the next 13 yea ...

You will receive a payment of 10000 per year forever

You will receive a payment of $10,000 per year forever; however the first payment will not begin for 9 years. If the appropriate interest rate is 7%, what is this worth today? Is this 10,000/.07 for 142,857.14? Does it m ...

Question - sns air is considering a new project the project

Question - SNS Air is considering a new project. The project will require $2,000,000 for new fixed assets. There is a total of $75,000 combined increase in inventories and account receivables which is partly financed by ...

Find the present value of this bond assume annual yield of

Find the present value of this bond. Assume annual yield of maturity is 4% and its Semiannual payments. When the Face value (FV) = $, 5000, coupon Payment (CPN) + 181.25, remaining payments (N) = 10.

Fools gold jewelry has just paid a stock dividend of 150

Fools Gold Jewelry has just paid a stock dividend of $1.50. Over the next 3 years, Fools Gold plans to increase their dividend by 10% each year. Beginning in year 4 Fools Gold will decrease their dividend to 5% growth fo ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert