The Apex Corp. has a target debt/equity ratio of 40/60. Its capital budget for next year is

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The Apex Corp. has a target debt/equity ratio of 40/60. Its capital budget for next year is estimated to be $$40$ million. Estimated net income is $$30$ million. If Apex follows a residual dividend policy, its dividend is expected to be:

A. $$6$ million.

B. $$12$ million.

C. $$18$ million.

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Corporate Finance A Practical Approach

ISBN: 9781118217290

2nd Edition

Authors: Michelle R Clayman, Martin S Fridson, George H Troughton, Matthew Scanlan

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Question Posted: Mar 30, 2024 01:01 AM

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The Apex Corp. has a target debt/equity ratio of 40/60. Its capital budget for next year is

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To determine the dividend under a residual dividend policy we first need to calculate the retained e...View the full answer

Corporate Finance A Practical Approach

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