National Co. forecasts that its earnings per share will be P4.00 this year. The company has 500,000,000 shares of stock outstanding. National Co. estimates that its capital budget for the upcoming year will be P800,000,000, and it is committed to funding the entire capital budget. The company is also committed to maintaining its dividend of P3.20 per share, and it wants to avoid issuing
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- Sheehan Corp. is forecasting an EPS of P3.00 for the coming year on its 400,000 outstanding shares of stock. Its capital budget is forecasted at P800,000, and it is committed to maintaining a P2.00 dividend per share. It finances with debt and common equity, but it wants to avoid issuing any new common stock during the coming year. Given these constraints, what percentage of the capital budget must be financed with debt?National Co. follows a strict residual dividend policy. The company is forecasting that its net income will be P500,000,000 this year. The company anticipates that its capital budget will be P300,000,000. The company has a target capital structure that consists of 50 percent equity and 50 percent long-term debt. What is the company’s anticipated dividend payout ratio?Blue Co. already determined the additional financing needed that it plans to raise through issuance of shares amounting to P2,450,000. The profit of the firm is P1,800,000 and it has a policy of retaining two-third of its net income. How much is the projected capital budget of Blue Co.?
- Banerjee Inc. wants to maintain a capital structure with 30 percent debt and 70 percent common equity. Its forecasted net income is $ 535,000, and its board of directors has decreed that no new stock to be issued during the coming year. If the firms follows the residual dividend policy, what is the maximum capital budget that is consistent with maintaining its capital structure ?SMPH has a strict residual dividend policy and they projected that the net result of their operation this year is positive at P12,000,000. SMPH has a target capital budget of P10,000,000 and a funding structure of 30% debt and 70% equity. How much of the net income will be used to fund the equity portion of the capital budget? Assuming the company has 400,000 issued ordinary shares on which 50,000 is held as treasury shares, what will be the dividends per share?WoC Inc. wants to increase its free cash flow by P180 million during the coming year, which should result in a higher EVA and stock price. The CFO has made these projections for the upcoming year: * EBIT is projected to equal P850 million. * Gross capital expenditures are expected to total to P360 million versus depreciation of P120 million, so its net capital expenditures should total P240 million. * The tax rate is 40%. * There will be no changes in cash or marketable securities, nor will there be any changes in notes payable or accruals. What increase in net working capital (in millions) would enable the firm to meet its target increase in FCF?
- WorldTrans is forecasting an EPS of $5.00 for the coming year on its 500,000 outstanding shares of stock. Its capital budget is forecasted at $625,000, and it is committed to maintaining a $4.00 dividend per share. It finances with debt and common equity, but it wants to avoid issuing any new common stock during the coming year. Given these constraints, what percentage of the capital budget must be financed with debt? Group of answer choices 24.00% 22.40% 20.00% 21.60% 23.60%CompUSA Corp.'s projected net income is $280 million, its current target capital structure is 25% debt and 75% equity, and its current target dividend payout ratio is 35%. CompUSA has more positive NPV projects than it can finance without issuing new stock, but its board of directors decided that it cannot issue any new shares in the foreseeable future. The CFO now wants to determine how the maximum capital budget would be affected by changes in capital structure policy and/or the target dividend payout policy. Compared to the current policy, how much increase could the total capital budget be if the target payout ratio is lowered to 20% and the target proportion of debt is raised to 35% debt and 65% equity at the same time, net income is held constant? (Please show work)SMPH has a strict residual dividend policy and they projected that the net result of their operation this year is positive at P12,000,000. SMPH has a target capital budget of P10,000,000 and a funding structure of 30% debt and 70% equity. Assuming the company has 400,000 issued ordinary shares on which 50,000 is held as treasury shares, what will be the dividends per share?
- Tong Foong Co. Ltd. has decided that its capital budget during the coming year will be $20 million. Its optimal capital structure is 60 percent equity and 40 percent debt. Its earnings before interest and taxes (EBIT) are projected to be $34.667 million for the year. The company has $200 million of assets; its average interest rate on outstanding debt is 10 percent; and its tax rate is 40 percent. Required: If the company follows the residual dividend policy and maintains the same capital structure, what will its dividend payout (in $) and the dividend payout ratio (in %)?A & Z has to raise RM3 million for its five-year budget. The company is considering the following financing sources to meet its requirement:- • Issue new common stock at 1 percent less than the market with the floatation cost of RM2 per share. The latest dividend paid by the company was RM1 per share. The dividend is expected to grow at an annual rate of 5 percent forever. Currently, the share price is trading at RM30 per share. • Issue a bond with a RM1000 par value that pays 7 percent annual interest and matures in 5 years. The bond has a market value of RM958 and a floatation cost is 11 percent of the market value. The corporate tax rate is 25 percent. Next Multiple Choicc #20 Compute the cost of common stock for A & Z.Witham, Inc. estimates that its retained earnings break point (BPRE) is $32 million, and its WACC is 11.2 percent if common equity comes from retained earnings. However, if the company issues new stock to raise new common equity, it estimates that its WACC will rise to 12.4 percent. The company is considering the following investment projects: Project A BUDE C Size $10 million A. $38 million B. $28 million C. $18 million D. $32 million E. None of the above 8 million 10 million 10 million 7 million What is the firm's optimal capital budget? IRR 14.0% 16.5 12.2 15.4 11.8