Sanchez Company has planned capital expenditures that total $2,000,000. The company wants to maintain a target capital structure that is 35% debt and 65% equity. The company forecasts that its net income this year will be $1,800,000. If the company follows a residual dividend policy, what will be its total dividend payment?
A. $100,000
B. $200,000
C. $300,000
D. $400,000
E. $500,000
Answer: E
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Because the production division at Heavenly Gates Inc. is $10,000 below budget due to process improvements, this year 30 percent of the savings will be returned to the division to spend as desired, as a form of
A. pay for performance. B. pay for knowledge. C. gainsharing. D. profit sharing. E. stock options.
?If interest rates decline, bondholders will earn:
A. ?a lower rate of return on reinvested cash flows. B. ?a higher current yield. C. ?no capital gain on the bond's maturity. D. ?a lower coupon interest on the bond. E. ?a higher maturity value on the maturity date.
Two common ways of retiring bonds before maturity are to (1) exercise a call option or (2) purchase them on the open market.
Answer the following statement true (T) or false (F)
A real rate of interest is the compensation paid by the borrower of funds to the lender
Indicate whether the statement is true or false