Question
Prostar Berhad is a residential development company which has been practising a dividend policy that ensures its optimal capital structure is maintained at 40% debt
Prostar Berhad is a residential development company which has been practising a dividend policy that ensures its optimal capital structure is maintained at 40% debt and 60% equity. This year, Prostar Berhad is expected to generate net income of RM200 million. The market seems to be positive with the prospect of the company as it recently secures a contract to build a network of 250 unit condominiums in Selangor. The project is expected to require new capital of RM320 million. Prostar Berhad has 200 million common shares outstanding which are currently traded at RM5 per share in the market. Based on the information provided, assuming you own 10,000 shares of Prostar Berhad, how much dividend would you expect to receive at the end of this year?
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