Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 13, 2024

Merlo, Inc. maintains a debt-equity ratio of 0.40 and follows a residual dividend policy. The company has after-tax earnings of $3,900 for the year and

Merlo, Inc. maintains a debt-equity ratio of 0.40 and follows a residual dividend policy. The company has after-tax earnings of $3,900 for the year and needs $3,500 for new investments. What is the total amount Merlo will pay out in dividends this year?

$1,400

$286

$0

$1,000

$2,386

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

Recommended Textbook for

The Company Valuation Playbook Invest With Confidence

Authors: Charles Sunnucks

1st Edition

1838470816, 978-1838470814

More Books

Students also viewed these Finance questions

Question

★★★★★

You have been hired by GT Investment Bank to work in the merger department. The analysis required for all potential acquisitions includes an examination of the target for any off-balance-sheet assets...

Answered: 1 week ago

Question

★★★★★

12. What are the most commonly used T carrier services? What data rates do they provide?

Answered: 1 week ago

Question

★★★★★

Denise Rubenstein and Christopher Mayor agreed to form Bayshore Sunrise Corp. (BSC) in New York to rent certain premises and operate a laundromat. BSC entered into a twenty-year commercial lease with...

Answered: 1 week ago

Question

★★★★★

Merlo, Inc. maintains a debt-equity ratio of 0.40 and follows a residual dividend policy. The company has after-tax earnings of $3,900 for the year and needs $3,500 for new investments. What is the...

Answered: 1 week ago

Question

★★★★★

Continued from Case study and Question 1 You are the Chief Financial Officer of Vegas Girl's Pizza involved as part of the IT Governance team to provide your opinion and solutions for the following...

Answered: 1 week ago

Question

★★★★★

Stien Inc. manufactures recycling boxes. The company has the following information available for the past year: Total sales Total operating income Degree of operating leverage $455,000 $42,000 5.50...

Answered: 1 week ago

Question

★★★★★

The interest charged on a $100,000 note payable, at the rate of 9%, for a year would be Select one: Oa. $9,000. O b. $5,000. c. $2,250. Od. $750.

Answered: 1 week ago

Question

★★★★★

2. The following purchases were made by a business house having three Departments: Department A 1,000 units Department B 2,000 units at a total cost of Rs. 1,00,000 Department C 2,400 units Stock on...

Answered: 1 week ago

Question

★★★★★

The Lentiviral vector is derived from the HIV virus but is modified to be safe for gene therapy in humans. Which of the following statements best describes the modifications to the viral genome of...

Answered: 1 week ago

Question

★★★★★

The airline industry is frequently used as an example of an oligopoly industry.Consider the following analytic problems: Consider AirTrain and BigJet, two airlines that currently fly non-stop flights...

Answered: 1 week ago

Question

★★★★★

1 Is there a relationship between cultural values in specific countries (e.g. collectivism, power distance, instrumentalism, humanism) and the way (indigenous) organizations respond to changes in...

Answered: 1 week ago

Question

★★★★★

4 For managers to operate effectively they need to learn to think more strategically and outside ordinary line responsibilities of operational fire fighting. This type of project work can facilitate...

Answered: 1 week ago

Question

★★★★★

3 As there is a continuing need for this type of working across borders and cultures, thought should be given to common decision premises based on the managing of different cultures, value systems,...

Answered: 1 week ago

Previous Question Next Question

Question

Merlo, Inc. maintains a debt-equity ratio of 0.40 and follows a residual dividend policy. The company has after-tax earnings of $3,900 for the year and

Merlo, Inc. maintains a debt-equity ratio of 0.40 and follows a residual dividend policy. The company has after-tax earnings of $3,900 for the year and needs $3,500 for new investments. What is the total amount Merlo will pay out in dividends this year? $1,400 $286 $0 $1,000 $2,386

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Recommended Textbook for

The Company Valuation Playbook Invest With Confidence

Students also viewed these Finance questions

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Merlo, Inc. maintains a debt-equity ratio of 0.40 and follows a residual dividend policy. The company has after-tax earnings of $3,900 for the year and needs $3,500 for new investments. What is the total amount Merlo will pay out in dividends this year?

$1,400

$286

$0

$1,000

$2,386