WorldTrans's projected capital budget is $2,000,000, its target capital structure is 40% debt and 60% equity, and its forecasted net income is $850,000. If the company follows the residual dividend model, how much dividends will it pay or, alternatively, how much new stock must it issue? Group of answer choices $381,500; $290,500 $287,000; $318,500 $325,500; $388,500 $0; $350,000 $378,000; $325,500
WorldTrans's projected capital budget is $2,000,000, its target capital structure is 40% debt and 60% equity, and its forecasted net income is $850,000. If the company follows the residual dividend model, how much dividends will it pay or, alternatively, how much new stock must it issue? Group of answer choices $381,500; $290,500 $287,000; $318,500 $325,500; $388,500 $0; $350,000 $378,000; $325,500
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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WorldTrans's projected capital budget is $2,000,000, its target capital structure is 40% debt and 60% equity, and its forecasted net income is $850,000. If the company follows the residual dividend model, how much dividends will it pay or, alternatively, how much new stock must it issue?
Group of answer choices
$381,500; $290,500
$287,000; $318,500
$325,500; $388,500
$0; $350,000
$378,000; $325,500
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