Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. your firm successfully issued new debt last year,

Your firm successfully issued new debt last year, but the debt carries covenants. Specifically, you...

80.2K

Verified Solution

Question

Finance

Your firm successfully issued new debt last year, but the debt carries covenants. Specifically, you can only pay dividends out of earnings made after the debt issue and you must maintain a minimum quick (acid-test) ratio

(Current AssetsInventory)/Current Liabilities

of

1.2.

Your net income this year was

$69.8

million. Your cash is

$9.9

million, your receivables are

$7.7

million, and your inventory is

$4.8

million. You have current liabilities of

$18.6

million. What is the maximum dividend you could pay (in cash and in stock) this year and still comply with your covenants?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

It is December 2018. You are analyzing YKNOT Inc., a company headquartered in Waukesha, WI, which...

Finance
Q

6. The final step in the infectious process is disease production (or pathology). By what major...

Biology
Q

In a nuclear power plant, heat from radioactive decay boils water and produces steam. If 250...

Physics
Q

Discussion Forum - Benefits In the Human Resources field, as a means of demonstrating value to employees,...

General Management
Q

The most likely limiting factor on the continued human population growth patternwill bedisease.lack of a...

Biology
Q

Rocket-powered sleds are used to test the human response toacceleration. If a rocket-powered sled is...

Physics
Q

d 7 2 r 4 6 3 Write the equation of circle B y x...

Geometry
Q

ppose that the aggregate demand curve crosses the aggregate supply curve in either of the...

Basic Math
Q

es Lita Lopez started Biz Consulting a new business and completed the following transactions during...

Basic Math
Q

A rectangle has a length of x and a width of 5x 4x What is...

Algebra
Q

Elige la respuesta que completa la siguiente oracin. Un contribuyente puede reclamar una exencin de...

Accounting
Q

Star Company purchased a small truck on 1/7/2021. The truck cost was $ 85,000, with...

Accounting