Question
Bharat Tea Plantation (BTP) has the following data and it follows the residual dividend policy. Capital budget $3,000,000 Net income (NI) $3,500,000 Debt ratio now
Bharat Tea Plantation (BTP) has the following data and it follows the residual dividend policy.
Capital budget $3,000,000
Net income (NI) $3,500,000
Debt ratio now 20%
[Hint: currently, BTP is 20% debt-financed]
BTP majority shareholders is seeking to have the forthcoming dividends increase. The Chief Financial Officer thinks it is feasible for BTP to increase its debt ratio to 60%.
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Money, Banking, Financial Markets & Institutions
Authors: Michael Brandl
2nd Edition
1337904821, 9781337904827
