17-4A. (Residual dividend theory) Terra Cotta finances new investments by 40 percent debt and 60 percent equity.

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17-4A. (Residual dividend theory) Terra Cotta finances new investments by 40 percent debt and 60 percent equity. The firm needs $640,000 for financing new investments. If retained earnings available for reinvestment equal $400,000, how much money will be available for dividends in accordance with the residual dividend theory?

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