Question
Given the economic downturn due to COVID-19, Orange Computers only expects $55.6 millions of earnings at the end of the 2021 financial year. The company
Given the economic downturn due to COVID-19, Orange Computers only expects $55.6 millions of earnings at the end of the 2021 financial year. The company would reinvest a part of the earnings in a new software project while paying out 59.0% in dividends. The new project is forecasted to have a return on investment of 23.0% annually.What will be the expected total dividends in the 2022 financial year if the cost of capital is 12.5% and the expected dividend payout would be 55.0% for that year?The expected total dividends in the 2022 financial year will be $ ?millions. (Give answer to 2 decimal places).
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