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I need the solution to solve this problem Time left 0:52:41 Currently the firm has total market value of debt $20 million and total market
I need the solution to solve this problem
Time left 0:52:41 Currently the firm has total market value of debt $20 million and total market value of equity $30 million. This capital structure is considered optimal by the management. The optimal capital budget for new investment for the coming period is determined to be $20 million. The total net income is estimated to be $15 million. The firm has 5 million common shares outstanding. The firm pays dividend based on the residual policy. What would the dividend payout ratio be? Select one: O a. 20% O b. 7.5% C. 5% O d. 3.33% Clear my choice
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