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pleasd read carefully and answer asvearly as possible The Giant Machinery has the current capital structure of 65% equity and 85% debt. Its net income
pleasd read carefully and answer asvearly as possible
The Giant Machinery has the current capital structure of 65% equity and 85% debt. Its net income in the current year is $250,000. The company is planning to launch a project that will requires an investment of $175,000 next year. Currently the share of Giant machinery is $25/share. Required: a) How much dividend Giant Machinery can pay its shareholders this year and what is dividend payout ratio of the company? Assume the Residual Dividend Payout Policy applies. 6) If the company is paying a dividend of $2.50/share and temorrow the stock will ge ex-dividend. Calculate the ex-dividend price tomorrow morning. Assuming the tax on dividend is 15% o) Little Equipment for Hire is a subsidiary in the Giant Machinery and currently under the liquidation plan due to the severe contraction of cheration due to corona virus. The company plans to pay total dividend of $2.5 million now and $ 7.5 million one year from now as a liquidating dividend. The required rate of return for shareholders is 12% Calculate the current value of the firm's equity in total and per share if the firm has 15 million shares outstandingStep by Step Solution
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