Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Given the information provided below, calculate the per share dividend by strictly following the Residual Dividend Model. In the Exaplanation box, discuss why the calculated
Given the information provided below, calculate the per share dividend by strictly following the Residual Dividend Model. In the Exaplanation box, discuss why the calculated dividends may not be appropriate. Then, create what you feel would be an ideal dividend policy for the firm and defend your recommendation in the Defense box. | ||||||||||
Dividends using Residual Dividend Model: | ||||||||||
Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | |||||||
Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||
Explanation (adjust cell height as necessary to fit response): | ||||||||||
Your recommended payout: | ||||||||||
Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | |||||||
Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||
Defense (adjust cell height as necessary to fit response): | ||||||||||
Target Capital Structure: | 65% Equity, 35% Debt | |
Number of Shares Oustanding | 3,000,000 | |
Quarter | Expected Net Income | Expected Capital Needs |
Q1 2022 | $ 1,700,000 | $ 850,000 |
Q2 2022 | $ 1,900,000 | $ 850,000 |
Q3 2022 | $ 1,850,000 | $ 1,100,000 |
Q4 2022 | $ 2,150,000 | $ 850,000 |
Q1 2023 | $ 2,050,000 | $ 850,000 |
Q2 2023 | $ 2,050,000 | $ 1,150,000 |
Q3 2023 | $ 1,950,000 | $ 850,000 |
Q4 2023 | $ 2,250,000 | $ 850,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started