D 10 Q1 Your firm practices a strict residual dividend policy and maintains a capital structure of 25% debt and 75% equity. Net earnings for the year are $3 million. a) What is the maximum amount of capital spending possible without new equity? 1 b) If planned investment outlays for the coming year are $3.6 million, will your firm be paying a dividend, and if so, how much will it be paying? 2 3 4 5 6c) Based on planned investment outlays of $3.6 million, what are your firm's retention and dividend payout ratios? 17 8 19 20 d) If your firm's next annual dividend payment is expected to be $0.25 and your firm's current share price is $7.00, what is the dividend yield (correct to two decimal places)? 22