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Babb Company requires $30,000,000 of new financing this year. The company's target debt ratio is 35%, and its earnings after taxes are $25,000,000. What dividend
Babb Company requires $30,000,000 of new financing this year. The company's target debt ratio is 35%, and its earnings after taxes are $25,000,000. What dividend will Babb pay if it uses the residual theory to set its dividend?
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$ 5,500,000.
$10,500,000.
$ 8,750,000.
Nothing.
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