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A firm has net income equal to $2,250,000. It's current capital structure is 60% equity and 40% debt. A new investment costs $1,000,000 and has
A firm has net income equal to $2,250,000. It's current capital structure is 60% equity and 40% debt. A new investment costs $1,000,000 and has a NPV of $62,500. If the firm has uses a residual dividend policy then the amount of dividends paid is_________.
a. 1,850,000
b. 1,650,000
c. 1,250,000
d. 2,250,000
e. 0
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