Question
Planetary Travel Co. has $162,000,000 in stockholders' equity. Common stock is $30,000,000 and the balance is retained earnings. The firm has $320,000,000 in total assets
Planetary Travel Co. has $162,000,000 in stockholders' equity. Common stock is $30,000,000 and the balance is retained earnings. The firm has $320,000,000 in total assets and 4 percent of this value is in cash. Earnings for the year are $20,000,000 and are included in retained earnings.
a.What is the legal limit on current dividends?(Do not round intermediate calculations. Input your answer in dollars, not millions (e.g., $1,234,000).)
Legal limit on current dividends
b.What is the practical limit based on liquidity?(Do not round intermediate calculations. Input your answer in dollars, not millions (e.g., $1,234,000).)
Practical limit based on liquidity
c.If the company pays out the amount in partb, what is the dividend payout ratio?(Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Payout ratio
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