Ortinaus Office Products and Supplies (OOPS) follows the constant payout ratio dividend policy by paying out 40
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Ortinau’s Office Products and Supplies (OOPS) follows the constant payout ratio dividend policy by paying out 40 percent of earnings each year. This year, OOPS expects the dividend payment to be 7 percent higher than last year’s payment, which was $130,000.
(a) What is the amount of net income that OOPS expects to generate this year?
(b) If its target capital structure calls for 50 percent common equity, what will be the total funds the company can invest in capital budgeting projects this year before new common stock must be issued to raise new funds?
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the... Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Dividend payout ratio 40 a Dividends last year 130000 Dividends this year 130000107 ...View the full answer
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