Question Details

Fauver Worldwide forecasts a capital budget 



 .	D&P Co. has a capital budget of $2,000,000.  The company wants to maintain a target capital structure that is 35% debt and 65% equity.  The company forecasts that its net income this year will be $1,800,000. If the company follows a residual dividend policy, what will be its total dividend payment?
								
	a.	$100,000						
	b.	$200,000						
	c.	$300,000						
	d.	$400,000						
	e.	$500,000						
								

 .	Becker Financial recently completed a 7-for-2 stock split.  Prior to the split, its stock sold for $90 per share.  If the total market value was unchanged by the split, what was the price of the stock following the split?
								
	a.	$23.21						
	b.	$24.43						
	c.	$25.71						
	d.	$27.00						
	e.	$28.35						
								

 .	Toombs Media Corp. recently completed a 3-for-1 stock split.  Prior to the split, its stock sold for $150 per share.  The firm's total market value was unchanged by the split.  Other things held constant, what is the best estimate of the stock's post-split price?
								
	a.	$50.00						
	b.	$52.50						
	c.	$55.13						
	d.	$57.88						
	e.	$60.78						

 .
Ting Technology has a capital budget of $850,000, it wants to maintain a target capital structure of 35% debt and 65% equity, and it also wants to pay a dividend of $400,000.  If the company follows a residual dividend policy, how much net income must it earn to meet its capital budgeting requirements and pay the dividend, all while keeping its capital structure in balance?
								
	a.	$904,875						
	b.	$952,500						
	c.	$1,000,125						
	d.	$1,050,131						
	e.	$1,102,638						
								

 .	Fauver Worldwide forecasts a capital budget of $650,000, and it wants to maintain a target capital structure of 40% debt and 60% equity.  It also wants to pay a dividend of $225,000.  If the company follows the residual dividend policy, how much net income must it earn to meet its capital requirements, pay the dividend, and keep the capital structure in balance?
								
	a.	$584,250						
	b.	$615,000						
	c.	$645,750						
	d.	$678,038						
	e.	$711,939						



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