hI I NEED HELP IN THIS FINANCE ASSIGNMENT .IT ON DIVIDEND AND PAY OUT RATIO . THANKS IN ADVANCE

Mount Saint Vincent University BUS 3360 Fall 2016 Assignment #3 Chapter 17 & 18 Total marks 100 Question #1 (14 marks) Margaret Corporation is evaluating an extra dividend versus a share repurchase. In either case, $25,000 would be spent. Current earnings are $1.40 per share, and the stock currently sells for $65 per share. There are 2,000 shares outstanding. Ignore taxes and other imperfections in answering the first two questions. a) Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth. (7 marks) b) What will be the effect on Margaret Corp's EPS and PE ratio under the two different scenarios? (7 Marks) In the real world, which of these actions would you recommend? Why? Question #2: (16 marks) Dundee Inc. predicts that earnings in the coming year will be $72 million. There are 22 million shares, and Dundee maintains a debtequity ratio of 1.8. a) Calculate the maximum investment funds available without issuing new equity and the increase in borrowing that goes along with it. (5 marks) b) Suppose the firm uses a residual dividend policy. Planned capital expenditures total $84 million. Based on this information, what will the dividend per share be? (5 marks) c) In part (b), how much borrowing will take place? What is the addition to retained earnings? (6 marks) Suppose Dundee plans no capital outlays for the coming year. What will the dividend be under a residual policy? What will new borrowing be? Question #3: (16 marks) Stock Dividends The company with the common equity accounts shown here has declared a 20 percent stock dividend when the market value of its stock is $52 per share. What effects on the equity accounts will the distribution of the stock dividend have? Suppose the company instead decides on a fourforone stock split. The firm's 75cent per share cash dividend on the new (postsplit) shares represents an increase of 10 percent over last year's dividend on the presplit stock. What effect does this have on the equity accounts? What was last year's dividend per share? Question #4: (26 marks) Consider the following financial statement information for the Cascade Corporation: Calculate the operating and cash cycles. Explain how you interpret your answer? Assume 365 days in a year. Question #5: (28 marks) Cottonwood Inc. has estimated sales (in millions) for the next four quarters as follows: Sales for the first quarter of the year after this one are projected at $170 million. Accounts receivable at the beginning of the year were $68 million. Cottonwood has a 45day collection period.Page 550Cottonwood's purchases from suppliers in a quarter are equal to 45 percent of the next quarter's forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 25 percent of sales. Interest and dividends are $12 million per quarter.Cottonwood plans a major capital outlay in the second quarter of $75 million. Finally, the company started the year with a $49 million cash balance and wishes to maintain a $30 million minimum balance. 1 Complete a cash budget for Cottonwood by filling in the following: 2 3 Assume that Cottonwood can borrow any needed funds on a shortterm basis at a rate of 3 percent per quarter and can invest any excess funds in shortterm marketable securities at a rate of 2 percent per quarter. Prepare a shortterm financial plan by filling in the following schedule. What is the net cash cost (total interest paid minus total investment income earned) for the year