Corporate Fin Focused Approach
5th Edition
ISBN: 9781285660516
Author: EHRHARDT
Publisher: Cengage
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- Define what a Dividend Payout ratio is. Define what a retention ratio is. Calculate the dividend payout ratio AND the retention ratio based on the data below: (hint: Dividend payout ratio is dividends/net income , Retention ratio is addition to retained earnings/net income) Rosegarten Corporation (income statement) Sales $1,000 Costs 833 Taxable Income $ 167 Taxes (21%) 35 Net Income $ 132 Dividends $44 Addition to Retained Earnings $88 Explain what your ratio's mean.......arrow_forwardThe most recent financial statements for Cardinal, Inc., are shown here: Income Statement Balance Sheet $27,000 17,900 $29,700 35,500 Sales Assets $65,200 Debt Costs Equity Тахable $ 9,100 Total $65,200 Total $65,200 income Taxes (24%) 2,184 Net income $ 6,916 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $2,700 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $31,320. What is the external financing needed? (Do not round intermediate calculations.) External financing neededarrow_forwardssume the following relationships for the Caulder Corp.: Sales/Total assets 1.2\times Return on assets (ROA ) 5.0% Return on equity (ROE) 15.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Do not round intermediate calculations. Round your answers to two decimal places.arrow_forward
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