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Explanation:
Net Liquidity Surplus = Total liquidity supply – Total liquidity demand
– Stockholder dividend payments
$31 million = $122 million – $89 million
– Stockholder dividend payments
Therefore, expected stockholder dividend payments must equal $2 million for the coming week.
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Q.3886 Prime savings has a projected net liquidity surplus of $31 million in the coming week. Given the following table showing Prime Savings’ supply and demand for liquidity, calculate the total expected stockholder dividend payments for the coming week.
Supplies of Liquidity Flowing into ABC Bank Ltd. Savings
Deposit inflows | $31
Revenues from nondeposit service sales | $23
Scheduled repayments of previous made customer loans | $5 $28
Asset sales | $15
Money market borrowings | $20
Total supply of liquidity | 122
The demand for liquidity flowing from ABC Bank Ltd. savings
Expected quality loan demand | $31
Necessary repayments of previous borrowings | $26
Deposit withdrawals | $22
Disbursements to cover operating expenses | $10
Total demand for liquidity excluding stockholder dividend payments | $89
A
$3 million
B
$2 million
C
$7 million
D
$11 million