Purchase Solution

# Total money to be raised

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I need help with assignment. Please see the attachment. It is a question about determining the amount of money that needs to be raised.

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Solution helps in estimation of total money to be raised

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Thank you for asking BrainMass. The answers are attached in the document, as well as posted here:

Marcus Corporation has a capital budget of \$5 million and wants to maintain a capital structure of 40% debt and 60% equity. The company expects net income of 4 million. What is the expected dividend payout ratio if the company follows a residual dividend policy?
50%
40%
20%
25%
none of the above

Expected dividend payout ratio will be =Dividend paid/Net income
Dividend= Net Income - Retained earnings
Retained earnings= Equity %*Capital Budget
=60%*5000000
=\$3000000
Dividend= 4000000-3000000
=\$1000000
Dividend Payout ratio= 1000000/4000000
=25%
Hence C.

MLC, Inc. stock sold for \$75 per share prior to a 4 for 1 stock split. What is the expected post-split stock price, everything else held constant?
\$50.00
\$37.50
\$18.75
\$71.00
none of the above
It will be 75/4
Hence C.

A company's dividend policy decision should not be influenced by which of the following?
Constraints imposed by the firm's bond indenture.
The fact that much of ...

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