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# Probability of a dividend payment

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The expected EBIT of Krupa Co next year is \$20 million with standard deviation of \$4 million. The tax rate of Krupa is 30% and it has 10 million shares of common, stock. Krupa has to pay \$8 million in interest and \$5 million in a sinking fund.

What is the probability that Krupa will be able to pay a dividend of \$1 per share next year and still have some money left over as retained earnings?

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The expected EBIT of Krupa Co next year is \$20 million with standard deviation of \$4 million. The tax rate of Krupa is 30% and it has 10 million shares of common, stock. Krupa has to pay \$8 million in interest and \$5 million in a sinking fund. What is the probability that Krupa will be able to pay a dividend of \$1 per share next year and still have some money left over as ...

#### Solution Summary

The solution calculates probability of a dividend payment.

\$2.19