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Middlesex Plastics Manufacturing had 2011 net Income of $15.0 trillion. Its 2012 Net Income is forecast to increase by 8%. The keep attach tos big(p) structure has been 35% debt and 65% Equity since 2010, and the company plans to maintain this superior structure in 2012. The company paid $3.0 zillion cash dividends in 2011. The company is planning to invest in a major big(p) project in 2012. The smashing calculate for this project is $12.0 Million in 2012. 1.If Middlesex increases its cash dividends in 2012 at the same cause of growth as its Net Income rate, what will be the construct 2012 dividend payout in Dollars? Net Income increased by 8 pct: $15,000,000 * 0.08= $16,200,000 Total dividends payout in Dollars: $3,000,000 * 0.08= $3,240,000 2.What is the 2012 dividend payout ratio if the company increases its dividends at 8%. The 2012 payout ratio is $3,240,000/16,200,000= 0.20% 3.If the company follows a equalizer dividend policy, and maintains its 35% Debt organise in its capital structure, and invests in the $12.

0 million capital budget in 2012, what would be the relaxation Dividends payout ratio? Residual Dividends Payout train in (Dollars) : (0.65)($12,000,000)=$7,800,000 $16,200,000- $7,800,000= $8,400,000 The Residual Dividends payout ratio: $8,400,000/$16,200,000= 0.52% 4.How much additional capital (Debt and/or Equity) will the company have to chew out from foreign sources in 2012 if it invests in this capital project, and follows a residual dividend policy? From outside sources: (0.35)($12,000,000)= $4,200,000 Or $12,000,000 -$7,800,000= $4,200,000If you want to get a wide-cut essay, order it on ou r website: OrderEssay.net

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