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Question
If Sulzer has 10 million shares outstanding, operating income (EBIT) of $42.4 million, and interest expenses of $6.8 million, what is Sulzer's dividend payout ratio, given that the dividend per share is $0.80? Assume a marginal tax rate of 40%.a. 56.3%
b. 31.5%
c. 50.4%
d. 37.5%
Answer
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Related questions
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Q:
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Q:
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b. that dividends may only be paid out of retained earnings
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Q:
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Q:
Explain the pecking order theory.
Q:
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Q:
The Albany Corporation has a present capital structure consisting of common stock ($200 million, 10 million shares) and debt ($150 million, 8%). The company is planning a major expansion and is undecided between two financing plans. Plan A:
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Q:
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Q:
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a. corporate income taxes
b. financial distress costs
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d. All of these are correct.
Q:
Due to both financial distress and agency costs, a firm should have a capital structure that
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b. contains all equity
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Q:
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a. initially rises slowly, then falls beyond some point
b. increases at a steady rate throughout the entire range
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Q:
Perfect capital markets imply the following:
a. there are no transactions costs for buying and selling securities
b. relevant information is readily available for individuals and is costless to obtain
c. all investors can borrow and lend at the same rate
d. All of these answers are correct.
Q:
Two prominent finance researchers (Modigliani and Miller) showed that
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b. the value of the firm is independent of its capital structure in perfect capital markets with no income taxes
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d. $25,000
Q:
Borkstran has sales of $7.8 million, a variable cost ratio of 0.6, EBIT of $1.1 million, and a degree of combined leverage of 3.4. What is Borkstran's degree of financial leverage?
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c. 2.29
d. 0.84
Q:
Kenzel has an EPS of $4.20 and sales are $9 million. If the firm has a degree of operating leverage of 4.0 and a degree of financial leverage of 5.2, forecast EPS if the firm expects a 4% sales decline.
a. $0.71
b. $3.49
c. $4.03
d. $3.33
Q:
Kermit's Hardware's (KH) fixed operating costs are $20.8 million and its variable cost ratio is 0.30. The firm has $10 million in bonds outstanding with a coupon interest rate of 9%. KH has 200,000 shares of common stock outstanding. The firm has revenues of $32.2 million and its marginal tax rate is 40%. Compute KH's degree of financial leverage.
a. 1.22
b. 2.07
c. 1.09
d. 1.04