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Assume that Bessemer net income for next year would be 500 million and its optimal capital budget for next year is 250 million. Also assume
Assume that Bessemer net income for next year would be 500 million and its optimal capital budget for next year is 250 million. Also assume that the debt ratio is now 80%. What would be the dividends paid based on residual model? Div. Paid = NI- {(Total Capital budget)(Target equity ratio)} A)$250m B) $500m C) $400m D) $450m E) $50 m OB OC OD OE
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