Silvana Inc

question 55

Multiple Choice

Silvana Inc. projects the following data for the coming year. If the firm follows the residual dividend policy and also maintains its target capital structure, what will its payout ratio be?

• A) 37.2%
• B) 39.1%
• C) 41.2%
• D) 43.3%
• E) 45.5%

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Definitions:

Cash Cycle

Cash Cycle, also known as the cash conversion cycle, measures the time it takes a company to convert resource inputs into cash flows.

Inventory Turnover

A metric that measures the efficiency of a company in managing its stock of goods through the calculation of the cost of goods sold divided by average inventory.

Accounts Receivable Period

The average number of days it takes for a company to collect payment from its credit sales.

Cash Cycle

The period between the outlay of cash for raw materials and receiving payment from customers for goods or services sold.