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Total money to be raised

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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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
=18.75= Answer
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 ...

Solution Summary

Solution helps in estimation of total money to be raised

$2.19