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Assume that a firm adheres to the residual dividend policy. It has a debt/equity ratio of 2:1, a net income of 53 million and it
Assume that a firm adheres to the residual dividend policy. It has a debt/equity ratio of 2:1, a net income of 53 million and it needs $4 million for new capital projects. What is the proportion of debt and equity in the capital structure? Select one: a. Debt equals 1/3; equity equals 2/3 b. Debt equals 1/2; equity equals 1/2 c. Debt equals 2/3; equity equals 1/3 d. None of the above are true
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