Question
Dentaltech Inc. projects the following data for the coming year. If the firm follows the residual dividend model and also maintains its target capital structure,
Dentaltech Inc. projects the following data for the coming year. If the firm follows the residual dividend model and also maintains its target capital structure, what will its dividend payment be?
| EBIT | $2,000,000 |
| Interest rate | 10% |
| Debt outstanding | $5,000,000 |
| Shares outstanding | 5,000,000 |
| Capital budget | $850,000 |
| % Debt | 40% |
| % Equity | 60% |
| Tax rate | 40% |
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Applied Quantitative Finance
Authors: W.; T. Kleinkow; G. Stahl Hardle
1st Edition
3540434607, 978-3540434603
