Please provide answer this question Question:Bauer Brewing Co. has the following data(dollars in thousands). If it follows the residualdividend model, what will its dividend payoutratio be?Capital budget $15,000% Debt55%Net income (NI) $9,000a. 25.00%b. 30.00%c. 45.00%d. 60.00%e. 75.00%Capital Budget:Capital budget can be explained as the amountof money that a company is planning to incur onits capital assets. A company can finance itscapital budget internally as well as throughexternal sources.

Equity = Capital Budget*(1-Debt%)Equity = 15,000*(1-55%)Equity = $6,750 Residual Earnings = Net…

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Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 2P

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