Your firm successfully issued new debt last year, but the debt carries covenants. Specifically, you can only

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Your firm successfully issued new debt last​ year, but the debt carries covenants.​ Specifically, you can only pay dividends out of earnings made after the debt issue and you must maintain a minimum quick​ (acid-test) ratio left parenthesis Current Assets minus Inventory right parenthesis divided by Current Liabilities
(Current Assets−Inventory)/Current Liabilities of 1.2. Your net income this year was $69.6 million. Your cash is $10.5 million, your receivables are $7.6 million, and your inventory is $4.6 million. You have current liabilities of $19.1 million. What is the maximum dividend you could pay​ (in cash and in​ stock) this year and still comply with your​ covenants?
​(Round to one decimal​ place.)  The maximum dividend would be $___ million.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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