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NEW QUESTION: 1
Residco, Inc. expects net income of $800,000 for the next fiscal year. Its targeted and current capital
structure is 40 percent debt and 60 percent common equity. The director of capital budgeting has
determined that the optimal capital spending for next year is $1.2 million. Residco does not plan to issue
any new common equity next year. If Residco follows a strict residual dividend policy, what is the
expected dividend payout ratio for next year?
A. 40.0 percent.
B. 90.0 percent.
C. 66.7 percent.
D. 10.0 percent.
Answer: D
Explanation:
Choice "d" is correct. A strict dividend policy guides a company's management to pay no more (and no
less) in dividends from net income to generate a change in equity that produces or maintains a targeted
capital structure. The dividend pay out ratio is the ratio of dividends to income. The call of the question
requires the calculation of the ratio of dividends to income assuming income, capital projects and capital
structure amounts as follows:

Assuming the company is in compliance with the 40/60 Debt/Equity capital structure to begin with, 60% of
the $1,200,000 in capital projects will be financed by additions to equity the come from new earnings of
$ 800,000. The equity funded portion of capital projects is $720,000 ($1,200,000 x 60%).
Following a strict residual dividend policy, the company will pay out the difference between is additions to
equity ($800,000 in income) and the amounts reinvested in the business ($720,000).
The dividend will be $80,000. ($800,000 - $720,000).
The dividend payout ratio is, therefore, 10% ($80,000 in dividends/ $800,000 in income).
Choices "a", "b", and "c" are incorrect, per the above calculation.

NEW QUESTION: 2
What is the first thing that a team should do to estimate user stories for a project?
A. Sort the user stories according to priority.
B. Schedule a team meeting to understand them.
C. Define the story points measure.
D. Estimate through function point analysis.
Answer: C
Explanation:
Explanation/Reference:
Explanation:

NEW QUESTION: 3
You are the business analyst for your organization. On your current project you'll be using the change- driven approach for defining requirements and gathering feedback. Which of the following statements best describes the change-driven approach?
A. The change-driven approach favors defining requirements through team interaction.
B. The change-driven approach favors defining requirements standardized templates.
C. The change-driven approach does not define the requirements until after a solution for the problem has been identified.
D. The change-driven approach favors defining requirements through experimentation.
Answer: A
Explanation:
Explanation/Reference:
Explanation:

NEW QUESTION: 4
What does the RiOS acronym stand for?
A. Riverbed Optimization System
B. Riverbed integrating Operating System
C. Riverbed is Outstandingly Simple
D. Riverbed is Orange Shamrocks
E. Riverbed interact Operations Shares
Answer: A