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
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 3MC: Assume that IWT has completed its IPO and has a $112.5 million capital budget planned for the coming...
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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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