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Clark Farms Inc has the following data, and it follows the residual dividend model. Currently it finances with 15% debt. Some Clark family members would
Clark Farms Inc has the following data, and it follows the residual dividend model. Currently it finances with 15% debt. Some Clark family members would like for the dividends to be increased. If Clark increased its debt ratio, which the firms treasurer thinks is feasible, by how much could the dividend be increased, holding other things constant? Capital Budget = $3,000,000, Net Income = $3,500,000 %Debt = 15% and %Debt after change 80%
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