Question: Bauer Brewing Co. has the following data (dollars in thousands). If it follows the residual dividend model, what will its dividend payout ratio be? Capital budget $15,000 % Debt 55% Net income (NI) $9,000 a. 25.00% b. 30.00% c. 45.00% d. 60.00% e. 75.00% Capital Budget: Capital budget can be explained as the amount of money that a company is planning to incur on its capital assets. A company can finance its capital budget internally as well as through external sources.

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
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Question:
Bauer Brewing Co. has the following data
(dollars in thousands). If it follows the residual
dividend model, what will its dividend payout
ratio be?
Capital budget $15,000
% Debt
55%
Net income (NI) $9,000
a. 25.00%
b. 30.00%
c. 45.00%
d. 60.00%
e. 75.00%
Capital Budget:
Capital budget can be explained as the amount
of money that a company is planning to incur on
its capital assets. A company can finance its
capital budget internally as well as through
external sources.
Transcribed Image Text:Question: Bauer Brewing Co. has the following data (dollars in thousands). If it follows the residual dividend model, what will its dividend payout ratio be? Capital budget $15,000 % Debt 55% Net income (NI) $9,000 a. 25.00% b. 30.00% c. 45.00% d. 60.00% e. 75.00% Capital Budget: Capital budget can be explained as the amount of money that a company is planning to incur on its capital assets. A company can finance its capital budget internally as well as through external sources.
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