Q&A: Need help with a corporate finance question?

Question by mikeyda: Need help with a corporate finance question?
Mansker Station Corporation has declared an annual dividend of $ 0.84 per share. For the year just ended, earnings were $ 7 per share.

(a) Mansker Station's payout ratio is ____percent.

(b)Suppose Mansker Station has 8 million shares outstanding. Borrowing for the coming year is planned at $ 32 million. Assuming a residual dividend policy, the equity portion of the planned investment outlays is $ _____ . Implicit in these calculations is a target debt−equity ratio of ______.


Answer
Answer by EJMA (Philippines)Answer:

Payout ratio = dividend per share / earnings per share
Payout ratio = $ .84 / $ 7
Payout ratio = 12.00%

I can't compute the planned investment outlays and the implicit target debt equity ratio without giving me the year's budgeted amount of investment.

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Corporate Finance