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1 . Nova Corp. estimates that the earnings next year will be $ 5 0 million. There are 2 0 million outstanding shares, and the

1. Nova Corp. estimates that the earnings next year will be $50 million. There are 20
million outstanding shares, and the company maintains a debt-to-equity ratio of 1.5.
The company follows a residual dividend policy and plans to spend $70 million on
capital expenditure. What will the dividend per share be next year? How much
borrowing will take place if the company wants to maintain its capital structure? (5
points)

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