Bakery co. make these assumptions for valuation purposes: a. The firm consists of a single asset that will generate pretax net cash flows of P3,000,000 per year forever. b. The income tax rate is 25%. c. After making paying taxes, the firm pays dividends to distribute any remaining cash flows to the equity shareholders each year. d. Equity shareholders have financed the asset entirely with P100,000,000 of equity capital. e. The cost of equity capital is 12%. 1. Compute for the dividend amount each year to the shareholders. 2. Compute for the dividend amount each year to the shareholders.
Bakery co. make these assumptions for valuation purposes: a. The firm consists of a single asset that will generate pretax net cash flows of P3,000,000 per year forever. b. The income tax rate is 25%. c. After making paying taxes, the firm pays dividends to distribute any remaining cash flows to the equity shareholders each year. d. Equity shareholders have financed the asset entirely with P100,000,000 of equity capital. e. The cost of equity capital is 12%. 1. Compute for the dividend amount each year to the shareholders. 2. Compute for the dividend amount each year to the shareholders.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...
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Bakery co. make these assumptions for valuation purposes:
a. The firm consists of a single asset that will generate pretax net
b. The income tax rate is 25%.
c. After making paying taxes, the firm pays dividends to distribute any remaining cash flows to the equity shareholders each year.
d. Equity shareholders have financed the asset entirely with P100,000,000 of equity capital.
e. The
1. Compute for the dividend amount each year to the shareholders.
2. Compute for the dividend amount each year to the shareholders.
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