Tinsley. Incorporated, wishes to maintain a growth rate of 14 percent per year and a debt-equity ratio of 4. The profit margin is 6.7 percent, and the ratio of total assets to sales is constant at 1.64. What dividend payout ratio is necessary to achieve this growth rate under these constraints? (A negative answer should be Indicated by a minus sign. Do not round Intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32.) Payout ratio -106 %

Tinsley. Incorporated, wishes to maintain a growth rate of 14 percent per year and a debt-equity ratio of 4. The profit margin is 6.7 percent, and the ratio of total assets to sales is constant at 1.64. What dividend payout ratio is necessary to achieve this growth rate under these constraints? (A negative answer should be Indicated by a minus sign. Do not round Intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32.) Payout ratio -106 %

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 13P

See similar textbooks

Similar questions

Tinsley, Incorporated, wishes to maintain a growth rate of 12 percent per year and a debt-equity ratio of .4. The profit margin is 5.6 percent, and the ratio of total assets to sales is constant at 1.59. What dividend payout ratio is necessary to achieve this growth rate under these constraints? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the maximum growth rate possible? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Tinsley, Incorporated, wishes to maintain a growth rate of 17 percent per year and a debt-equity ratio of 1.1. The profit margin is 4.4 percent, and total asset turnover is constant at 1.04. What is the dividend payout ratio? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the maximum sustainable growth rate for this company? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
he newspaper reported last week that Tisch Enterprises earned $34.17 million this year. The report also stated that the firm’s return on equity is 18 percent. The firm retains 75 percent of its earnings. What is the firm's earnings growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Earnings growth rate % What will next year's earnings be? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Next year’s earnings $ Synovec Corp. is experiencing rapid growth. Dividends are expected to grow at 28 percent per year during the next three years, 18 percent over the following year, and then 5 percent per year indefinitely. The required return on this stock is 10 percent, and the stock currently sells for $98 per share. What is the projected dividend for the coming year? (Do not round intermediate…
Appleton Corp. wishes to maintain a growth rate of 13.4 percent and a dividend payout ratio of 38 percent. The ratio of total assets to sales is constant at .80 and profit margin is at 8.1 percent. If Appleton Corp also wished to maintain a constant debt-equity ratio, what must it be? Do not round your intermediate calculations. Round your final answer to 2 decimal places.
The newspaper reported last week that Tisch Enterprises earned $34.17 million this year. The report also stated that the firm’s return on equity is 18 percent. The firm retains 75 percent of its earnings. What is the firm's earnings growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Earnings growth rate % What will next year's earnings be? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Next year’s earnings $
Arts and Crafts, Inc., will pay a dividend of $3 per share in 1 year. It sells at $50 a share, and firms in the same industry provide an expected rate of return of 12%. What must be the expected growth rate of the company’s dividends? (Do not round intermediate calculations. Enter your answer as a whole percent.)
Redan, Inc., is expected to maintain a constant 5.75 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 4.25 percent, what is the required return on the company’s stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
McCormack co. Wishes to maintain a growth rate of 6 percent a year, a debt equity ratio of 0.49, and a dividend payout ratio of 58 percent. The ratio of total assets to sales is constant at 1.41. What profit margin must the firm achieve?
Lauren Entertainment, Inc., has an 16 percent annual growth rate compared to the market rate of 6 percent. If the market multiple is 18, determine P/E ratios for Lauren Entertainment, Inc., assuming its dividend yield is zero, its beta is 1.00 and you feel it can maintain its superior growth rate for: 1.the next 12 years. Do not round intermediate calculations. Round your answer to two decimal places. 2. the next 6 years. Do not round intermediate calculations. Round your answer to two decimal places.
Plank’s Plants had net income of $6,000 on sales of $70,000 last year. The firm paid a dividend of $960. Total assets were $300,000, of which $120,000 was financed by debt. a. What is the firm’s sustainable growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) b. If the firm grows at its sustainable growth rate, how much debt will be issued next year? (Do not round intermediate calculations.) c. What would be the maximum possible growth rate if the firm did not issue any debt next year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)
Levine, Inc., has an ROA of 7.7 percent and a payout ratio of 27 percent. What is its internal growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Wanbay Corporation is interested in estimating its additional financing needed to support a growth in sales next year. Last year, revenues were RM1million; net profit margin was 6 percent; investment in assets was RM750,000; payables and accruals were RM100,000; stockholders’ equity at the end of the year was RM450,000. The venture did not pay out any dividends and does not expect to pay dividends for the future. Elaborate the concept of sustainable sales growth rates in relation to the additional fund needed (AFN). Calculate the additional fund needed (AFN) next year to support a 30 percent increase in sales. If the expected sales growth were only 15 percent, compute the change in the additional fund needed (AFN).