Boehm Corporation has had stable earnings growth of 8% a year for the past 10 years and in 2013 Boehm paid dividends of $2.6 million on net income of…

Boehm Corporation has had stable earnings growth of 8% a year for the past 10 years andin 2013 Boehm paid dividends of $2.6 million on net income of $9.8 million. However, in2014 earnings are expected to jump to $12.6 million, and Boehm plans to invest $7.3million in a plant expansion. This one-time unusual earnings growth won’t bemaintained, though, and after 2014 Boehm will return to its previous 8% earnings growthrate. Its target debt ratio is 35%.a. Calculate Boehm’s total dividends for 2014 under each of the following policies:(1) Its 2014 dividend payment is set to force dividends to grow at the long-run growthrate in earnings.(2) It continues the 2013 dividend payout ratio.(3) It uses a pure residual policy with all distributions in the form of dividends (35% ofthe $7.3 million investment is financed with debt).(4) It employs a regular-dividend-plus-extras policy, with the regular dividend beingbased on the long-run growth rate and the extra dividend being set according tothe residual policy.b. Which of the preceding policies would you recommend? restrict your choices to the ones listed, but justify your answer.c. Does a 2014 dividened of $9 million seem reasonable in view of your answers to parts a and b? If not, should the dividend be higher or lower?

Boehm Corporation has had stable earnings growth of 8% a year for the past 10 years and in 2013 Boehm paid dividends of $2.6 million on net income of $9.8million. However, in 2014 earnings are…

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more