Compute Dividends

Another option for financing is to call in the outstanding bonds you have issued and obtain a loan with more favorable terms than the bonds you would issue Presently, the company has a 6% coupon bond that matures in 11 years The bond pays interest semiannually

What is the market price of a $1,000 face value bond if the current rate of interest is 129%?

How much will it cost the company to call in 1,000 of these bonds?

Applying Financial Statement Relations to Compute Dividends

Colgate-Palmolive reports the following dollar balances in its retained earnings account

($ millions)20152014Retained earnings$18,861$18,832

During 2015, Colgate-Palmolive reported net income of $1,384 million

a What amount of dividends, if any, did Colgate-Palmolive pay to its stockholders in 2015?

$Answer

000 points out of 100

million

b What percent of its net income did Colgate-Palmolive pay out as dividends in 2015?

Solution: