Bulldogs Inc. has a capital structure that consists of 20% equity and the rest with debt. The company expects to report P3 million in net income this year, and 40% of the net income will be paid out to shareholders as dividends. How large must the firm’s capital budget be this year without it having to issue any fresh common shares? P1.51 million P9.0 million P0.24 million P12.00 million
Bulldogs Inc. has a capital structure that consists of 20% equity and the rest with debt. The company expects to report P3 million in net income this year, and 40% of the net income will be paid out to shareholders as dividends. How large must the firm’s capital budget be this year without it having to issue any fresh common shares? P1.51 million P9.0 million P0.24 million P12.00 million
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Bulldogs Inc. has a capital structure that consists of 20% equity and the rest with debt. The company expects to report P3 million in net income this year, and 40% of the net income will be paid out to shareholders as dividends. How large must the firm’s capital budget be this year without it having to issue any fresh common shares?
P1.51 million
P9.0 million
P0.24 million
P12.00 million
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