rmediate Problems 16-4 16-5 STOCK SPLIT After a five-for-one stock split, Iskandar Company paid a STOCK SPLIT AF dividend of $0.90 per new share, which represents a 9% increase over last year's pre-split dividend. What was last year's dividend per share? EXTERNAL EQUITY FINANCING Northern Pacific Heating and Cooling Inc. has a 6-month backlog of orders for its patented solar heating system. To meet this demand, management plans to expand production capacity by 40% with a $10 million investment in plant and machinery. The firm wants to maintain a 40% debt level in its capital structure. It also wants to maintain its past dividend policy of distributing 45% of last year's net income. In 2015, net income was $5 million. How much external equity must Northern Pacific seek at the beginning of 2016 to expand capacity as desired? Assune that the firm uses only debt and common equity in its capital structure. a kit yang Structure Dividend is considering three on investment. The ing three inde SIDUAL DIVIDEND MODEL Welch Company is co 16-6 for these projects RESIDUAL DIVIDEND MODEL pendent projects, each of which requires mated internal rate of retum (IRR) an presented here: fernal rate of retum (IRR) and cost of capital for Cost of capital = 16% Cost of capital = 12% Cost of capital = 8% % Project H (high risk): Project M (medium risk): Project L (low risk): IRR IRR = 2044 TRR = 10% IRR = 9% the projects' costs of capital vary because the different levels of risk. The company's optimal capital stru 50% debt and 50% common equity, and it expects to have $7,287 500. If Welch establishes its dividends from the resia model, what will be its payout ratio? use the projects have pital structure calls for have net income of m the residual dividend