Chapter Review and Self Test Problems

18.1 Residual Dividend Policy The Readata Corporation practices a strict residual dividend policy and maintains a capital structure of 60 percent debt, 40 percent equity. Earnings for the year are $5,000. What is the maximum amount of capital spending possible without selling new equity? Suppose that planned investment outlays for the coming year are $12,000. Will Readata be paying a dividend? If so, how much?

Ross et al.: Fundamentals of Corporate Finance, Sixth Edition, Alternate Edition

VI. Cost of Capital and Long-Term Financial Policy

18. Dividends and Dividend Policy

© The McGraw-Hill Companies, 2002

CHAPTER 18 Dividends and Dividend Policy

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