This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Bass Frozen Foods, Inc has found three acceptable investment opportunities. The three projects ... (Read 85 times)

nramada

  • Hero Member
  • *****
  • Posts: 580
on: Jul 10, 2018
Bass Frozen Foods, Inc has found three acceptable investment opportunities. The three projects require a total
  of 5 million in financing. It is the company's policy to finance its investments by using 40 debt and 60
  common equity.
 
  The firm has generated 3.8 million dollars from its operations that could be used to finance the
  common equity portion of its investments.
  a. What portion of the new investments will be financed by common equity and what portion by debt?
  b. According to the residual dividend theory, how much would be paid out in dividends?

Question 2

With regard to the hedging principle, which of the following would be an appropriate method to
  finance a minimum level of current assets required for year round operations?
 
  A) common stock
  B) trade credit
  C) short-term notes payable
  D) revolving credit agreements that must be repaid in a period less than 1 year


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

britb2u

  • Sr. Member
  • ****
  • Posts: 331
Reply #1 on: Jul 10, 2018
Answer to Question 1

a. Common equity = .60  5 million = 3,000,000
Debt = .40  5 million = 2,000,000
b. Dividends = 3,800,000 - 3,000,000 = 800,000

Answer to Question 2

A


nramada

  • Member
  • Posts: 580
Reply 2 on: Jul 10, 2018
YES! Correct, THANKS for helping me on my review

AISCAMPING

  • Member
  • Posts: 347
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

The Romans did not use numerals to indicate fractions but instead used words to indicate parts of a whole.

Did you know?

There are 60,000 miles of blood vessels in every adult human.

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Did you know?

When Gabriel Fahrenheit invented the first mercury thermometer, he called "zero degrees" the lowest temperature he was able to attain with a mixture of ice and salt. For the upper point of his scale, he used 96°, which he measured as normal human body temperature (we know it to be 98.6° today because of more accurate thermometers).

Carnivorous plants, such as this pitcher plant (Sarracenia purpurea) are commonly found in bog habit Carnivorous plants, such as this pitcher plant (Sarracenia purpurea) are commonly found in bog habit
Acceptable ranges of heart rate Acceptable ranges of heart rate
Vitamins Found Widely in the Food Groups Vitamins Found Widely in the Food Groups
Plant foods such as grains and vegetables are the main sources of nonheme iron in your diet Plant foods such as grains and vegetables are the main sources of nonheme iron in your diet
Potential Interactions of Medications, Herbs, Nutrients, and Foods (2 of 2) Potential Interactions of Medications, Herbs, Nutrients, and Foods (2 of 2)
Which is the most acceptable electron dot structure for N2H2? Which is the most acceptable electron dot structure for N2H2?
Video: Secondary Active Transport

For a complete list of videos, visit our video library