Answered: Suppose a firm pays total dividends of…

Name: Suppose a firm pays total dividends of $420,000 out of net income of $
Uploaded: 2022-11-22T13:58:24.000Z
Channel: Bartleby
Description: Suppose a firm pays total dividends of $420,000 out of net income of $3.7 million. What would the firm's payout ratio be?

Business

Finance

Suppose a firm pays total dividends of $420,000 out of net income of $3.7 million. What would the firm's payout ratio be?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter2: Financial Statements, Cash Flow, And Taxes

Section2.8: Performance Evaluation

Problem 1ST

See similar textbooks

Related questions

Q: A firm has a debt to equity ratio of 40%, debt of $600,000, and net income of $100,000. What is the…

A: Debt to Equity ratio = Debt/Equity 40% = $600,000 / Equity Equity = $600,000 / 40% Equity = $1500000

Q: Suppose a firm pays total dividends of $35,000 out of net income of $200,000. What would the firm's…

A: Total dividends= $35,000 Net income= $200,000 Firm's payout ratio=?

Q: RY Corporation had a profit margin of 6.25%, a total assets turnover of 1.5, and an equity…

A: Return on equity (ROE): ROE measure the profitability of the organization in relation to the equity.…

Q: a firm has earnings of $500 million of which 40% will be paid out to investors. the firm has $2.5…

A: When all the earnings available for common shareholders are distributed to common shareholders, the…

Q: Suppose a firm is paying dividend of $500000 out of net income of $2 million. What is the firm's…

A: Given: Dividend = $500000 Net income = $2000000

Q: Calculate the enterprise value of a firm with a market capitalization (market value of equity) of…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: What is the firm's PEG ratio?

A: PEG ratio displays the relationship between the Earnings growth and the P/E ratio over a specific…

Q: A firm has a profit margin of 5.5% and an equity multiplier of 3.0. Its sales are $140 million, and…

A: Profit margin = 5.5%Equity multiplier = 3.0Sales = $140 millionTotal assets = $84 million

Q: If you know that a firm has its equity increased by JD10,000 . The firm has additional investments…

A: Retained earnings: Retained earnings is the earning set aside by the business from a portion of…

Q: Suppose a firm pays total dividends of $456,000 out of net income of $1.9 million. What would the…

A: Calculation of payout ratio:Hence, the payout ratio is 0.24.

Q: firm has net income of $2.3 million.the firms capital structure consists of equity of $15 million…

A: Sustainable Growth Rate(SGR) is the maximum growth rate that can be sustained by the company without…

Q: How much long-term debt does the firm have?

A: Long Term Debt: A debt issued by the corporation having a term of more than one year is called…

Q: The Firm had sales of $33 million, operating expenses of $14 million, interest of $4 million and…

A: Net Income: The net income of the business is determined by subtracting the total expenses from the…

Q: You are analysing NBM firm and obtained the following information: FCFF reported as R198 million,…

A: FCFE is the free cash flow to the equity The formula for the same: FCFE = FCFF - Interest (1-tax…

Q: If Average assets and capital are 900,000 and 540,000, respectively, with a net income of 47,520,…

A: Return on equity is a type of financial ratio of a company. Return on equity is a performance…

Q: Consider a retail firm with a net profit margin of 3.36%, a total asset turnover of 1.88, total…

A: Total Assets Turnover = Net SalesAverage Total Assets Net Profit = Net Sales x Net Profit Margin…

Q: What is the net asset value of an investment company with $9,500,000 in assets, $610,000 in current…

A: price per share =(value of the assets- current liabilities)/no of shares outstanding…

Q: A company has $6 billion of net income, $2 billion of depreciationand amortization, $80 billion of…

A: Given data; Net income = $6 billion Depreciation and amortization = $2 billion common equity = $80…

Q: A firm has $ 1.2 million in current assets and $ 1 million in current liabilities. If the company…

A: Current Ratio: A current ratio is a calculation that provides the relation between current assets…

Q: A firm has a tax burden ratio of .75, a leverage ratio of 1.25, an interest burden of .6, and a…

A: Formula:

Q: A firm has Capital of GHS 10,00,000; Sales of GHS 5,00,000; Gross Profit of GHS 2,00,000 and…

A: Net Profit Ratio(NPR) is used determine profitability of entity. It shows proportion of turnover of…

Q: If a corporation earns $240,000 and the payout ratio (proportion distributed) is 35 percent, what is…

A: Given : Income = $240,000Payout Ratio = 35% Dividends = Income * Payout Ratio…

Q: NEKO Inc. has forecasted that its net income will be P400,000. The company has debt ratio of 30%.…

A: Net income (NI) = P400,000 Debt ratio = 30% Equity ratio (ER) = 100%-30% = 70% Investment…

Q: Consider a company with sales of $18,000.0 million, cost of goods sold of 42% of sales, other…

A: Net income: Profits available after deducting all the expenditure is called as net income.…

Q: The firm had sales of $33 million, operating expenses of $14 million, interest of $4 million and…

A: Earnings before interest & taxes(EBIT) is the income generated by an entity before making…

Q: How much did Guo pay in cash dividends, and what were its average return on assets?

Q: A firm has gross profit of $45 million, EBIT of $20 million, and net income of $8.5 million. If the…

A: EPS stands for earnings per share. EPS means the amount of profit a company makes per share.…

Q: An all -equity firm reports a net profit margin of 12% on sales of $6 million. If the tax rate is…

Q: If we know that a firm has a net profit margin of 4.3 %, total asset turnover of 0.77, and a…

A: The computation of ROE is as follows: Hence, the return on investment is 4.50%

Q: A firm's current market value of equity is $100 million. It has one million shares outstanding. The…

A: Current market price per share Current market price per share = Market value of equity / Number of…

Q: Suppose the growth rate of the firm's profit is 7 percent, the interest rate is 9 percent, and the…

A: In the given question we need to compute the value of the firm.

Q: A company has sales of $200 million, NOPAT of $12 million, netincome of $8 million, net operating…

A: Given information: Sales amounted to $200 million, NOPAT of $12 million, Net income of $8 million,…

Q: Suppose a firm pays total dividends of $420,000 out of net income of $3.7 million. What would the…

A: Pay-out ratio:The pay-out ratio is the ratio between the total dividend and net income. it is also…

Q: Use the information below to build a properly formatted income statement. A: The firm has 25,280,000…

A: Ratios are the tools that compare the two quantitative figures and give the necessary information as…

Q: A firm has total sales of $64 million. It has gross profit of $12 million, operating income of $8.5…

A: Total sales is $64million Gross profit is $12million Operating income of $8.5 million Net income of…

Q: A firm earns $895 million in profits and pays $626 million in dividends for the year. The firm has…

A: There is a difference between preferred stock and common stock. Preferred stock do not carry any…

Q: A firm earns $895 million in profits and pays $626 million in dividends for the year. The firm has…

A: Number of common shares = 390 million Number of preferred shares = 135 million Preferred dividend =…

Q: a. generate an income statement and show net income b. what is the company's operating cash flow?…

A: Hey, since there are multiple subpart questions posted, we will answer the first three questions. If…

Q: Compute the degree of financial leverage for a firm with EBIT of P6,000,000, fixed costs of…

A: Degree-of-Financial Leverage or DFL shows effect of variation in earnings of an entity or EBIT due…

Q: A firm has a market value equal to its book value. Currently, the firm has excess cash of $7,000 and…

A: Market Value = Book Value Excess Cash = 7000 Other Assets = 21000 Equity = 28000 Number of shares…

Q: Consider a retail firm with a net profit margin of 3.71%, a total asset turnover of 1.78, total…

A: ROE of a firm means return on equity. It denotes the rate of return which is earned by the equity…

Question

Practice Pack

OFFON

Suppose a firm pays total dividends of $420,000 out of net income of $3.7 million. What would the firm's payout ratio be?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

Includes step-by-step video

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Trending now

This is a popular solution!

Learn your way

Includes step-by-step video

Step by step

Solved in 5 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Suppose a firm pays total dividends of $35,000 out of net income of $200,000. What would the firm's payout ratio be?
Suppose a firm pays total dividends of $420,000 out of net income of $3.7 million. What would the firm's payout ratio be? Multiple Choice .42 .114 1.14 8.810
Suppose a firm is paying dividend of $500000 out of net income of $2 million. What is the firm's payout ratio?
If a firm has an EV of $820 million and EBITDA of $187 million, what is its EV ratio?
If we know that a firm has a net profit margin of 4.3%, total asset turnover of 0.77, and a financial leverage multiplier of 1.37, what is its ROE? What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity? The firm's ROE is %. (Round to two decimal places.) What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity? (Select from the drop-down menus.) Observe the modified DuPont formula (see) and notice that each component can be compared with industry standards to assess the firm's performance. Therefore, the advantage of using the Dupont system is that ROE is broken into three distinct components. Starting at the right we see how has increased assets over the owners' original equity. Next, moving to the left, we see how efficiently the firm used its sales. to…
A firm has total book value of equity of $2 million, a market to book ratio (market price/book value) of 4, and a book value per share of $5.00. What is the market value per share of the firm's equity?
If we know that a firm has a net profit margin of 4.3 %, total asset turnover of 0.77, and a financial leverage multiplier of 1.36, what is its ROE? What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity?
O'Brien Inc. has the following data: rRF = 5.00%; RPM = 9.00%; and b = 0.65. What is the firm's cost of equity from retained earnings based on the CAPM?
Assume that your firm has a return on assets of 14.7% , sales of $16,625,000, total assets of $4,750,000, a return on equity of 36.75%, an interest rate on total debt of 10 percent, and a tax rate of 40 percent. Given this information, determine the firm's basic earnings power. (Hint: you may need to work an income statement backwards to get EBIT, in which case you will need to determine the firm's net income or profit, as well as its interest expense on total debt.)
Suppose a firm has a retention ratio of 65 percent and net income of $9.9 million. How much does it pay out in dividends? (Enter your answer in dollars not in millions.)
You have the following ratios for a firm you're analyzing: Working capital / total assets = 0.7 Retained earnings / total assets = 0.3 EBIT / total assets = 0.2 market value of equity / book value of LT debt = 1.3 sales / total assets = 0.4 Calculate the firm's Z-score. Enter
As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and g = 8.00% (constant). Based on the DCF approach, what is the cost of common from retained earnings? Please show formula and answer