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Question 2 Mee Tank Foods Berhad has found three acceptable investment opportunities. The three projects require a total of RM5 million in financing. It is
Question 2 Mee Tank Foods Berhad has found three acceptable investment opportunities. The three projects require a total of RM5 million in financing. It is the company's policy to finance its investments by using 30% debt and 70% common equity. The firm has generated RM3.8 million dollars from its operations that could be used to finance the common equity portion of its investments. Last year, the company declared dividend of RM3 20 per unit and total earning was RM4 million. Mee Tarik has 100,000 shares outstanding Required: a) What portion of the new investments will be financed by common equity and what portion by debt? b) If the company maintains a residual dividend policy, how large a dividend per share will each shareholder receive this year? C) If the company maintains a constant ratio dividend policy, how large a dividend per share will each shareholder receive this year
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