Question
MomCorp has five potential projects under review, the details of which are listed below: Project A: WACC required = 6.3%, IRR = 9.1%, Capital investment
MomCorp has five potential projects under review, the details of which are listed below:
Project A: WACC required = 6.3%, IRR = 9.1%, Capital investment required = $191 thousand
Project B: WACC required = 9.4%, IRR = 5.0%, Capital investment required = $115 thousand
Project C: WACC required = 13.3%, IRR = 13.5%, Capital investment required = $276 thousand
Project D: WACC required = 8.3%, IRR = 10.4%, Capital investment required = $132 thousand
Project E: WACC required = 1.3%, IRR = 1.1%, Capital investment required = $161 thousand
If MomCorp expects a net income of $891 thousand & wishes to retain its debt-to-equity ratio of 42%, how much in dividends with should distribute to its common shareholders under the residual dividend model?
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