The capital budget forecast for the Santano Company is $725,000. The CFO wants to maintain a target capital structure of 45% debt and 55% equity, and it also wants to pay dividends of $500,000. If the company follows the residual dividend policy, how much income must it earn, and what will its dividend payout ratio be? Net Income Payout
A. $ 898,750 55.63%
B. $ 943,688 58.41%
C. $ 990,872 61.34%
D. $1,040,415 64.40%
E. $1,092,436 67.62%
Answer: A
Business
You might also like to view...
Discuss and exemplify what an effective introduction helps you do.
What will be an ideal response?
Business
The merchandise purchases budget depends on information from the sales budget.
Answer the following statement true (T) or false (F)
Business
____________________ reports provide data or findings, analyses, and conclusions. They may also provide recommendations if requested
Fill in the blank(s) with correct word
Business
The dividend growth model has a limitation due to the necessity to have a non-growing dividend pattern in order for it to work
Indicate whether the statement is true or false.
Business