Question
As a financial manager for Micro Electronics, Inc, you have the following information: i) The company follows a residual dividend policy; ii) The company has
As a financial manager for Micro Electronics, Inc, you have the following information: i) The company follows a residual dividend policy; ii) The company has a Capital budget $900,000 iii) The companys Target capital structure 30% debt, 70% equity; iv) Forecasted net income $800,000 Please answer the following questions:
a. What will be the amount funded with equity for the project?
b. Compute the amount of the dividend.
As a financial manager for Micro Electronics, Inc, you have the following information: i) The company follows a residual dividend policy; ii) The company has a Capital budget $900,000 iii) The companys Target capital structure 30% debt, 70% equity; iv) Forecasted net income $800,000 Please answer the following questions:
a. What will be the amount funded with equity for the project? (sample answer: $250,000) b. Compute the amount of the dividend. (sample answer: $250,000) c. Compute the dividend pay-out ratio.
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