Question
19) Suppose a firm pays total dividends of $320,000 out of net income of $2.7 million. What would the firm's payout ratio be? A) .32
19) Suppose a firm pays total dividends of $320,000 out of net income of $2.7 million. What would the firm's payout ratio be?
A) .32 B) 1.19 C) .119 D) 8.438
20) Calculating Fees on a Loan Commitment You have approached your local bank for a start-up loan commitment for $1,500,000 needed to open an auto repair store. You have requested that the term of the loan be one-year. Your bank has offered you the following terms: size of loan commitment = $1,500,000, term = 1 year, up-front fee = 25 basis points, back-end fee = 40 basis points. If you take down 95 percent of the total loan commitment, calculate the total fees you have paid on this loan commitment.
A) $ 3,750 B) $ 9,450 C) $ 6,000 D) $ 4,050
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