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jinjermaxinejohnston
20.01.2020 •
Business
The capital budget of creative ventures inc. is $1,000,000. the company wants to maintain a target capital structure that is 30% debt and 70% equity. the company forecasts that its net income this year will be $800,000. if the company follows a residual dividend policy, what will be its total dividend payment?
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Ответ:
$100,000
Explanation:
According to residual dividend policy, companies pay dividend from profits or retained earnings to shareholders after meeting all of its capital funding requirements according to prescribed debt / equity ratio.
As the Creative Ventures has capital budget of $1,000,000, 70% of which is to be funded via equity (profit / retained earnings), thus $700,000 is to be funded from equity.
Dividend: Net Income - Equity portion of capital funding
Dividend: $800,000 - $700,000
Dividend: $100,000
Ответ: