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In: Finance
Blue Elk Manufacturing reported sales of $720,000 at the end of last year, but this year,...
Blue Elk Manufacturing reported sales of $720,000 at the end of last year, but this year, sales are expected to grow by 7%. Blue Elk expects to maintain its current profit margin of 21% and dividend payout ratio of 30%. The following information was taken from Blue Elk’s balance sheet: Total assets: $400,000 Accounts payable: $80,000 Notes payable: $35,000 Accrued liabilities: $70,000 Based on the AFN equation, the firm’s AFN for the current year is _________.
a. -86,174
b. -105,324
c. -95,749
d. -100,536
Because of its excess funds, Blue Elk Manufacturing is thinking about raising its dividend payout ratio to satisfy shareholders. Blue Elk could pay out _______% of its earnings to shareholders without needing to raise any external capital. (Hint: What can Blue Elk increase its dividend payout ratio to before the AFN becomes positive?)
a. 71.4%
b. 89.2%
c. 75.8%
d. 62.4 %
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jeff jeffy answered 1 year agoRelated Solutions
Blue Elk Manufacturing reported sales of $720,000 at the end of last year, but this year,...
Blue Elk Manufacturing reported sales of $720,000 at the end of
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from Blue Elk’s balance sheet:
Total assets:
$400,000
Accounts payable:
$80,000
Notes payable:
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Accrued liabilities:
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