Ask Question, Ask an Expert


Ask Accounting Basics Expert

Q1) Allensworth Motors predicts that its earnings per share will be $3.00 this year. Company has 500 million shares of stock outstanding. Allensworth evaluates that its capital budget for upcoming year will be $800 million, and it is committed to funding complete capital budget. Company is also committed to sustaining its dividend of $2.00 per share, and it wishes to avoid issuing new common stock. Company's capital structure consists of debt and common stock.  Given above constraints, what portion of $800 million capital budget will be funded with debt?

a. 53.13%
b. 46.02%
c. 40.00%
d. 6.25%
e. 37.50%

Q2) Redwood Systems follows strict residual dividend policy. Company evaluates that its capital expenditures this year will be $40 million, its net income will be $30 million, and its target capital structure is 60 percent equity and 40 percent debt.  Compute the company's dividend payout ratio?

a. 80%
b. 60%
c. 40%
d. 20%
e. 15%

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M917930

Have any Question? 

Related Questions in Accounting Basics

The president of coopie awards was analyzing the actual and

The president of Coopie Awards was analyzing the actual and budgeted results of operations for the current year. She noticed several favorable variances and, in a meeting gave accolades to the production manager. She als ...

Review of current accounting issuestaskin your accounting

Review of Current Accounting Issues Task In your accounting career you will be required to analyse current accounting issues and communicate your theoretical understanding to your professional colleagues and your clients ...

Primary task response within the discussion board area

Primary Task Response: Within the Discussion Board area, write 300-400 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your cla ...

Moonee ponds 3039max matters is a semi-retired physical

MOONEE PONDS 3039 Max Matters is a semi-retired physical education teacher and is starting a wholesale home gym sales business on the 1st September 2016, he is contributing the following assets and liabilities to commenc ...

Multiple choice1 which of the following statements is

MULTIPLE CHOICE 1) Which of the following statements is CORRECT? a. One of the advantages of the corporate form of organization is that it avoids double taxation. b. It is easier to transfer one's ownership interest in a ...

Research has shown that situational pressures and

Research has shown that situational pressures and opportunity are factors that contribute to fraudulent behavior. Required a. Identify two situational pressures in a public company that would increase the likelihood of f ...

Accountingmoviesplus inc is in its third year of business

Accounting MoviesPlus, Inc. is in its third year of business. The company offers DVD rental to online customers for a fixed monthly fee. For $20 per month, a customer receives three DVDs each month, one at a time as the ...

Big alrsquos pizza inc a new subsidiary of big alrsquos

Big Al’s Pizza, Inc., a new subsidiary of Big Al’s Pizza Emporium, has been established to produce partially baked, flash-frozen, 16-inch meat pizzas to be sold wholesale to grocery and convenience stores and school cafe ...

Mulberry corporation has an august 31 year-end mulberry had

Mulberry Corporation has an August 31 year-end. Mulberry had $50,000 in accumulated E & P at the beginning of its 2015 fiscal year (September 1, 2014) and during the year, it incurred a $75,000 operating loss. It also di ...

Fbl5030 fundamentals of value creation ion business

FBL5030 Fundamentals of Value Creation ion Business Assignment - Accounting Assignment Requirements- 1.  The following is a list of 10 organisations/companies, one of which will be the subject of your analysis. CODE      ...

  • 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

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate