Premium Essay

Submitted By seillihcd

Words 3433

Pages 14

Words 3433

Pages 14

Dividends, Capital Structures Decisions

Ma. Cesarlita G. Josol

MBA - Acquisitions

Strayer University

1

DIVIDENDS, CAPITAL STRUCTURES DECISIONS

2

Use the following information for Questions 1 through 3:

Boehm Corporation has had stable earnings growth of 8% a year for the past 10 years and in 2013 Boehm paid dividends of $2.6 million on net income of $9.8 million. However, in 2014 earnings are expected to jump to $12.6 million, and Boehm plans to invest $7.3 million in a plant expansion. This one- time unusual earnings growth won’t be maintained, though, and after 2014

Boehm will return to its previous 8% earnings growth rate. Its target debt ratio is 35%.

Calculate Boehm’s total dividends for 2014 under each of the following policies:

Growth rate

Net Income

Dividend

Dividend/Net Income Ratio

Dividend/Net Income %

8%

2013

$9.8

$2.6

0.265306

26.5306%

2014

$10.584

$2.808

2014

$12.600

$3.34

QUESTION #1: Calculate Boehm’s total dividends for 2014 if its 2014 dividend payment is set to force dividends to grow at the long-run growth rate in earnings.

Step 1: Find the dividend / net income ratio for 2013

Dividend/ Net Income Ratio = Dividend 2013 / Net Income2013

= $2.6 million / $9.8 million

= 0.265306

Dividend/Net Income Ratio = 26.5306 %

**The dividend/net income ratio will be used as the rate for the projection of dividends

Step 2: Calculate the 2014 projected net income using the long-run growth rate for Boehm, which is at 8%.

Net Income Projected 2014 @ 8% = Net Income 2013 + (Net Income2013) (Growth Rate)

= $9.8 million + ($9.8 million) (0.08)

DIVIDENDS, CAPITAL STRUCTURES DECISIONS

3

Net Income Net Income Projected 2014 @ 8% = $10.584 million

Step 3: Compute for the total dividend when earnings for 2014 is calculated using the 8%

growth…...

Premium Essay

...Homework 5 Solutions Assigned: 29 September 2004 Due: 06 October 2004 C:\Documents and Settings\John Bailer\My Documents\baileraj\Classes\Fall 2004\sta402\hw\Homework-5.doc 1. Refer to the 4 group (packaging method)- log-bacterial growth study. In this exercise, you will use SAS/GRAPH to construct figures displaying the means and standard deviations. a. Construct a figure containing side-by-side boxplots using the INTERPOL=BOX option associated with a SYMBOL statement used with PROC GPLOT. ODS RTF file='D:\baileraj\Classes\Fall 2003\sta402\hw\hw5-prob1a.rtf’; proc gplot data=class.meat; title h=1.5 ‘Plot of log(Bacterial count) vs. packaging condition'; title2 h=1 '[boxplot is plotted for each condition]'; symbol1 interpol=box /* plots +/- 2 SD from the mean at each conc */ value=dot; plot logcount*condition; run; ODS RTF CLOSE; [pic] b. Construct a figure with the data points plotted. Superimpose the mean plus/minus 2 std. deviation segments on this plot. ODS RTF file='D:\baileraj\Classes\Fall 2003\sta402\hw\hw5-prob1b.rtf’; proc gplot data=class.meat; title h=1.5 ‘Plot of log(Bacterial count) vs. packaging condition'; title2 h=1 '[mean +/- 2SD is plotted for each condition]'; symbol1 interpol=STD2T /* plots +/- 2 SD from the mean at each conc */ /* T= add top and bottom to each 2 SD diff */ value=dot; plot logcount*condition; run; ODS RTF CLOSE; [pic] c. ......

Words: 963 - Pages: 4

Free Essay

...Fin.534 Chapter 14 Homework 1. Myron Gordon and John Lintner believe that the required return on equity increases as the dividend payout ratio is decreased. Their argument is based on the assumption that c. investors view dividends as being less risky than potential future capital gains. Section 14-3c of our book points out that future gains can be “taxes more favorably than dividend income” 2. Which of the following should not influence a firm's dividend policy decision? c. The fact that much of the firm's equipment has been leased rather than bought and owned. Answer C here is the only answer that does not talk about shareholders or taxes that related to dividends. Answer c does not influence the dividend policy decision. 3.Which of the following statements about dividend policies is correct? d. The clientele effect suggests that companies should follow a stable dividend policy. Section 14.6 talks about the Clientele Effect and putting into place a stable payout type of schedule for the company to use. This would be in the company’s best interest towards dividend policies. 4. Which of the following would be most likely to lead to a decrease in a firm's dividend payout ratio? b. Its R&D efforts pay off, and it now has more high-return investment opportunities. The rest of the answers seem to increase a firms dividend payout. After reading Chapter 14, I feel that a decrease in the firm’s......

Words: 315 - Pages: 2

Premium Essay

...Homework Set Chapter 11 1. Who are the sellers in the factor markets? Who are the sellers in the product markets? 2. If U.S. imports total $1,360 billion and U.S. exports total $950 billion, what would U.S. net exports equal? 3. Determine whether each of the following is true or false: a. In the circular flow of income model, total expenditures must always equal total income b. There is an inverse relationship between the price level and the quantity of aggregate supply c. If the U.S. price level decreases, net exports will decline 4. Indicate what each of the variables in the following equation represents. Y = C + G + I = X 5. If the price level and the level of real GDP both increase, would it be more likely that the aggregate the supply curve or the aggregate demand curve shifted? Would this shift represent an increase or a decrease? 6. In terms of aggregate demand and aggregate supply, what does the graph below depict? 7. If the price of Pepsi increases, U.S. consumers can easily substitute to an other brand of cola in the same stores. If the price level of all U.S. goods increases, to what type of goods would U.S consumers have to substitute in order to avoid the higher prices? What would this do to the quantity demanded of all U.S. goods? 8. What would happen to the aggregate supply curve if worker productivity increased as a result of increased training and education? 9. Assumer that you go on vacation to France. If the exchange rate......

Words: 341 - Pages: 2

Premium Essay

...FIN 534 Financial Management Complete Homework Sets To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-534-financial-management-complete-homework-sets/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 534 Financial Management Complete Homework Sets FIN 534 Week 2 Homework Set 1 Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homework assignment is worth 100 points. Use the following information for Questions 1 through 8: Assume that you recently graduated and have just reported to work as an investment advisor at the one of the firms on Wall Street. You have been presented and asked to review the following Income Statement and Balance Sheets of one of the firm’s clients. Your boss has developed the following set of questions you must answer. 1. What is the free cash flow for 2013? 2. Suppose Congress changed the tax laws so that Berndt’s depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? 3. Calculate the 2013 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company’s liquidity position in 2013? 4. Calculate the 2013......

Words: 2481 - Pages: 10

Premium Essay

...FIN 534-Financial Management Homework Sets http://www.projbid.com/downloads/fin-534-financial-management-homework-sets/ FIN 534 Week 2 Homework Set 1 Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homework assignment is worth 100 points. Use the following information for Questions 1 through 8: Assume that you recently graduated and have just reported to work as an investment advisor at the one of the firms on Wall Street. You have been presented and asked to review the following Income Statement and Balance Sheets of one of the firm’s clients. Your boss has developed the following set of questions you must answer. 1. What is the free cash flow for 2013? 2. Suppose Congress changed the tax laws so that Berndt’s depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? 3. Calculate the 2013 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company’s liquidity position in 2013? 4. Calculate the 2013 inventory turnover, days sales outstanding (DSO), fixed assets turnover, and total assets turnover. 5. Calculate the 2013 debt ratio, liabilities-to-assets ratio, times-interest-earned, and EBITDA coverage ratios. What can you conclude from......

Words: 2427 - Pages: 10

Premium Essay

...FIN 534 Financial Management Complete Homework Sets To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-534-financial-management-complete-homework-sets/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 534 Financial Management Complete Homework Sets FIN 534 Week 2 Homework Set 1 Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homework assignment is worth 100 points. Use the following information for Questions 1 through 8: Assume that you recently graduated and have just reported to work as an investment advisor at the one of the firms on Wall Street. You have been presented and asked to review the following Income Statement and Balance Sheets of one of the firm’s clients. Your boss has developed the following set of questions you must answer. 1. What is the free cash flow for 2013? 2. Suppose Congress changed the tax laws so that Berndt’s depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? 3. Calculate the 2013 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company’s liquidity position in 2013? 4. Calculate the 2013......

Words: 2464 - Pages: 10

Premium Essay

...FIN 534 Financial Management Complete Homework Sets http://homeworkfy.com/downloads/fin-534-financial-management-complete-homework-sets/ To Get this Tutorial Copy & Paste above URL Into Your Browser Hit Us Email for Any Inquiry at: Homeworkfy@gmail.com Visit our Site for More Tutorials: (http://homeworkfy.com/ ) FIN 534 Week 2 Homework Set 1 Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homework assignment is worth 100 points. Use the following information for Questions 1 through 8: Assume that you recently graduated and have just reported to work as an investment advisor at the one of the firms on Wall Street. You have been presented and asked to review the following Income Statement and Balance Sheets of one of the firm’s clients. Your boss has developed the following set of questions you must answer. 1. What is the free cash flow for 2013? 2. Suppose Congress changed the tax laws so that Berndt’s depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? 3. Calculate the 2013 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company’s liquidity position in 2013? 4. Calculate the 2013 inventory turnover, days sales outstanding......

Words: 2458 - Pages: 10

Free Essay

...FIN 535 WEEK 3 HOMEWORK CHAPTER 4 & 5 To purchase this visit here: http://www.activitymode.com/product/fin-535-week-3-homework-chapter-4-5/ Contact us at: SUPPORT@ACTIVITYMODE.COM FIN 535 WEEK 3 HOMEWORK CHAPTER 4 & 5 FIN 535 Week 3 Homework Chapter 4,5 - Strayer University NEW Activity mode aims to provide quality study notes and tutorials to the students of FIN 535 Week 3 Homework Chapter 4 & 5 in order to ace their studies. FIN 535 WEEK 3 HOMEWORK CHAPTER 4 & 5 To purchase this visit here: http://www.activitymode.com/product/fin-535-week-3-homework-chapter-4-5/ Contact us at: SUPPORT@ACTIVITYMODE.COM FIN 535 WEEK 3 HOMEWORK CHAPTER 4 & 5 FIN 535 Week 3 Homework Chapter 4,5 - Strayer University NEW Activity mode aims to provide quality study notes and tutorials to the students of FIN 535 Week 3 Homework Chapter 4 & 5 in order to ace their studies. FIN 535 WEEK 3 HOMEWORK CHAPTER 4 & 5 To purchase this visit here: http://www.activitymode.com/product/fin-535-week-3-homework-chapter-4-5/ Contact us at: SUPPORT@ACTIVITYMODE.COM FIN 535 WEEK 3 HOMEWORK CHAPTER 4 & 5 FIN 535 Week 3 Homework Chapter 4,5 - Strayer University NEW Activity mode aims to provide quality study notes and tutorials to the students of FIN 535 Week 3 Homework Chapter 4 & 5 in order to ace their studies. FIN 535 WEEK 3 HOMEWORK CHAPTER 4 & 5 To purchase this visit here: http://www.activitymode.com/product/fin-535-week-3-homework-chapter-4-5/ Contact us......

Words: 396 - Pages: 2

Premium Essay

...025, we accept H0 at 5% significance level, otherwise we reject H0. 2) For HPQ LOGR: H0: µLOGR = 0 HA: µLOGR ≠ 0 α=0.05 t~t2012, 0.025 (n = 2013) tj0 = (0.000039-0) / (0.021745/√2013) = 0.08, t2012, 0.025 = 1.96 Since tj0 < t2012, 0.025, we accept H0 at 5% significance level, otherwise we reject H0. 3) For QQQ LOGR: H0: µLOGR = 0 HA: µLOGR ≠ 0 α=0.05 t~t2012, 0.025 (n = 2013) tj0 = (0.000467-0) / (0.014261/√2013) = 1.47, t2012, 0.025 = 1.96 Since tj0 < t2012, 0.025, we accept H0 at 5% significance level, otherwise we reject H0. (d) Hypothesis test: 1) For TXRH LOGR: H0: SLOGR = 0 HA: SLOGR ≠ 0 α=0.05 t~t2012, 0.025 (n = 2013) tj0 = 0.482322 / √ (6/2013) = 8.83, t2012, 0.025 = 1.96 Since tj0 > t2012, 0.025, we reject H0 at 5% significance level, otherwise we accept H0. 2) For HPQ LOGR: H0: SLOGR = 0 HA: SLOGR ≠ 0 α=0.05 t~t2012, 0.025 (n = 2013) tj0 = -0.544118 / √ (6/2013) = -9.97, t2012, 0.025 = 1.96 Since ǀtj0ǀ > t2012, 0.025, we reject H0 at 5% significance level, otherwise we accept H0. 3) For QQQ LOGR: H0: SLOGR = 0 HA: SLOGR ≠ 0 α=0.05 t~t2012, 0.025 (n = 2013) tj0 = -0.092710 / √ (6/2013) = -1.70, t2012, 0.025 = 1.96 Since ǀtj0ǀ < t2012, 0.025, we accept H0 at 5% significance level, otherwise we reject H0. (e) Hypothesis test: 1) For TXRH LOGR: H0: KLOGR - 3 = 0 HA: KLOGR - 3 ≠ 0 α=0.05 t~t2012, 0.025 (n = 2013) tj0 = (4.501200-3) / √ (24/2013) = 13.75, t2012, 0.025 = 1.96 Since tj0 > t2012, 0.025, we reject H0 at 5% significance level,......

Words: 449 - Pages: 2

Premium Essay

...FIN 534 Financial Management Complete Homework Sets To Buy this Class Copy & paste below link in your Brower http://homeworkregency.com/downloads/fin-534-financial-management-complete-homework-sets/ Or Visit Our Website Visit : http://www.homeworkregency.com Email Us : homeworkregency@gmail.com FIN 534 Financial Management Complete Homework Sets FIN 534 Week 2 Homework Set 1 Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homework assignment is worth 100 points. Use the following information for Questions 1 through 8: Assume that you recently graduated and have just reported to work as an investment advisor at the one of the firms on Wall Street. You have been presented and asked to review the following Income Statement and Balance Sheets of one of the firm’s clients. Your boss has developed the following set of questions you must answer. 1. What is the free cash flow for 2013? 2. Suppose Congress changed the tax laws so that Berndt’s depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? 3. Calculate the 2013 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company’s liquidity position in 2013? 4. Calculate the 2013......

Words: 2464 - Pages: 10

Premium Essay

...Homework Set 1 Fin 534 Pro. Jeffery Woo Fannie Spears January 17, 2016 Strayer University 1. What is the free cash flow for 2014? NOPAT = 502,640 (1-0.40) “ =301,584 NOWC = operating current assets-operating current liabilities “ = 2,608,480 – 739,800 NOWC = 1,868,680 Total net operating capital = NOWC + operating long term assets Total net operating capital = 2,705,520 Net income in operating capital = total net operating capital 2014 – total net operating 2013 Net investment in operating capital = 2,705,520 – 2,257,632 Net investment in operating capital = 447,888 Free cash flow = NOPAT – NIOC Free cash flow = 301,584 – 447,888 Free cash flow = (146,304) 2. Suppose Congress changed the tax laws so that Berndt’s depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? Net income would drop down, while net cash flow would go up. 3. Calculate the 2014 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company’s liquidity position in 2013? Quick ratio = Current assets – Inventories Quick ratio = 2,680,112 – 1,716,480 Current liabilities 1,039,800 Quick ratio = 0.9 Current ratio = Current Assets Current ratio = 2,680,112 Current liabilities ...

Words: 363 - Pages: 2

Premium Essay

...FIN 401 Homework Click Link Below To Buy: http://hwcampus.com/shop/fin-401-homework/ The table below reports data consisting of 30 observations. Each observation contains two values (one for Y and one for X). Please construct a linear regression of the structure: Y = a + bX. What is the magnitude of the coefficient b in this model? Y X 161 46 205 63 301 97 115 30 251 81 89 25 290 94 159 52 46 21 259 88 212 64 301 98 174 54 149 42 130 42 249 79 297 95 229 66 109 59 129 47 212 65 200 67 180 57 303 97 231 73 225 71 138 42 138 42 270 86 192 60 Question 1 options: 5.630 3.035 0.998 20.442 Save Question 2 (1 point) The table below consists of 30 observations where each observation includes two values (Y and X). Please estimate the following linear formulation using the table below: Y = a + b X and please use the estimated model to predict the value of Y when X is 50. Y X 161 46 205 63 301 97 115 30 251 81 89 25 290 94 159 52 46 21 259 88 212 64 301 98 174 54 149 42 130 42 249 79 297 95 229 66 109 59 129 47 212 65 200 67 180 57 303 97 231 73 225 71 138 42 138 42 270 86 192 60 Question 2 options: 157.37 155.25 158.39 151.95 Save Question 3 (1 point) Please use the dataset from the table below to estimate the following linear regression model: Y = a + b X What is the residual for the very first observation in the dataset (Y=161,......

Words: 523 - Pages: 3

Free Essay

...FIN 370 Chapter 5 Problem Sets Follow Below Link to Download Tutorial http://homeworklance.com/downloads/fin-370-chapter-5-problem-sets/ For More Information Visit Our Website ( http://homeworklance.com/ ) Email us At: Support@homeworklance.com or lancehomework@gmail.com Complete the following problem sets from Chapter 5 in Microsoft® Excel®: • 5-1: Compute the future value in year 9 of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 using a 10 percent interest rate. • 5-3: Compute the future value in year 7 of a $2,000 deposit in year 1 and another $2,500 deposit at the end of year 4 using an 8 percent interest rate • 5-5: Compute the present value of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 if interest rates are 10 percent • 5-7: What’s the present value of a $900 annuity payment over 5 years if interest rates are 8%? • 5-12: If the present value of an ordinary , 6 year annuity is $8,500 and interest rates are 9.5 percent, what’s the present value of the annuity due? • 5-15: A loan is offered with monthly payments and a 10 percent APR. What’s the loan’s effective annual rate (EAR)? • 5-39 (Calculate monthly payment only): You wish to buy a $25,000 car. The dealer offers you a 4-year loan with a 9 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequence of such a decision be?...

Words: 273 - Pages: 2

Premium Essay

...FIN 401 Homework Click Link Below To Buy: http://hwcampus.com/shop/fin-401-homework/ The table below reports data consisting of 30 observations. Each observation contains two values (one for Y and one for X). Please construct a linear regression of the structure: Y = a + bX. What is the magnitude of the coefficient b in this model? Y X 161 46 205 63 301 97 115 30 251 81 89 25 290 94 159 52 46 21 259 88 212 64 301 98 174 54 149 42 130 42 249 79 297 95 229 66 109 59 129 47 212 65 200 67 180 57 303 97 231 73 225 71 138 42 138 42 270 86 192 60 Question 1 options: 5.630 3.035 0.998 20.442 Save Question 2 (1 point) The table below consists of 30 observations where each observation includes two values (Y and X). Please estimate the following linear formulation using the table below: Y = a + b X and please use the estimated model to predict the value of Y when X is 50. Y X 161 46 205 63 301 97 115 30 251 81 89 25 290 94 159 52 46 21 259 88 212 64 301 98 174 54 149 42 130 42 249 79 297 95 229 66 109 59 129 47 212 65 200 67 180 57 303 97 231 73 225 71 138 42 138 42 270 86 192 60 Question 2 options: 157.37 155.25 158.39 151.95 Save Question 3 (1 point) Please use the dataset from the table below to estimate the following linear regression model: Y = a + b X What is the residual for the very first observation in the dataset (Y=161,......

Words: 523 - Pages: 3

Free Essay

...5,200 Sales Revenue 5,200 (record sales on account) April 5, 2012 Note Receivable 5,200 Accounts Receivable – Hubbard Company 5,200 (record acceptance of Hubbard Company note) April 12, 2012 Cash 12,199.20 Note receivable – Lima Company 12,000 Interest Revenue 199.20 (record collection of note and interest) June 2, 2012 Cash 4,119.88 Note receivable – Noel Company 4,000 Interest Revenue 119.88 (record collection of note and interest) June 15, 2012 Accounts Receivable 2,000 Sales Revenue 2,000 June 15, 2012 Note Receivable 2,000 Account Receivable 2,000 E9-8 Jan 1, 2012 Accumulated Depreciation - Equipment 62,000 Equipment 62,000 ( record the retirement of machinery) June 30, 2012 Cash 5,000 Accum Depreciation - Equipment 24,000 Equipment 36,000 Loss on disposal of PPE asset 7,000 (record sale of computer at loss) 36,000/3=12,000 5,000-(36,000-24,000)=7,000 Dec 31,2012 Cash 9,000 Accum Depreciation - Equipment 5,400 Equipment 25,000 Loss on disposal of PPE asset 10,200 (record sale at a loss) 9,000/5 = 1,800 1,800*3 = 5,400 9,400-(25,000-5,400) = 10,200 P101-A Jan 1, 2012 Cash 18,000 Note Payable 18,000 (record not to Premier Bank 5% 4 months) Jan 5, 2012 Cash 6,254 Sales revenue 5,900 Sale tax......

Words: 402 - Pages: 2

- Fin 535 Week 2 Homework Chapter 2 & 3 Essay
- Fin 535 Week 3 Homework Chapter 4 & 5 Essay
- Fin 535 Week 7 Homework Chapter 13 & 14... Essay
- Fin 535 Week 4 Homework Chapter 6 & 7 Essay
- Fin 535 Week 8 Homework Chapter 15 & 16... Essay
- United States Essay
- Fin 535 Week 10 Homework Chapter 19 to... Essay
- Fin 535 Week 6 Homework Chapter 10 to 12... Essay