Dick plc faces the following marginal efficiency of investment profile. All projects are indivisible. Project IRR (%)
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Dick plc faces the following marginal efficiency of investment profile. All projects are indivisible.
Project IRR (%) Required outlay (£m)
A 15 3 B 24 5 C 40 2 D 12 4 E 21 7 Dick’s shareholders require a return of 20 per cent. Dick has just reported earnings of £9 million.
What amount of dividend would you recommend if Dick is unable to raise external finance?
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