CAMZ Co.'s future earnings for the next four years are predicted below. Assuming there are 500,000 shares outstanding common stock, what will be the yearly dividend per share be if the dividend policy is as follows: a. Small regular dividend of P0.75 plus a year-end extra of 40% of the profits exceeding P1million. b. An annual investment requirement of P1.8 million  is to be funded. Capital structure is 50% debt and 50% equity. Residual Dividend policy is establised.   Projected annual earnings: 1st year P900,000 2nd year 1,200,000 3rd year 850,000 4th year 1,350,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 8P
Question

CAMZ Co.'s future earnings for the next four years are predicted below. Assuming there are 500,000 shares outstanding common stock, what will be the yearly dividend per share be if the dividend policy is as follows:

a. Small regular dividend of P0.75 plus a year-end extra of 40% of the profits exceeding P1million.

b. An annual investment requirement of P1.8 million  is to be funded. Capital structure is 50% debt and 50% equity. Residual Dividend policy is establised.

 

Projected annual earnings:

1st year P900,000
2nd year 1,200,000
3rd year 850,000
4th year 1,350,000

 

Expert Solution

This question hasn't been answered yet.

Check out a sample Q&A here
Ask an expert
Blurred answer
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Corporate Fin Focused Approach
Corporate Fin Focused Approach
Finance
ISBN:
9781285660516
Author:
EHRHARDT
Publisher:
Cengage