Question 44

A firm expects to have net income of $5,000,000 during the next year.The company's target capital structure is 35% debt and 65% equity.The company's director of capital budgeting has determined that the optimal capital budget for the coming year is $6,000,000.If SL Computer follows a residual distribution policy (with all distributions in the form of dividends) to determine the coming year's dividend, then what is the firm's expected dividend payments?

$1,100,000

$3,900,000

$5,000,000

$6,000,000

Question 45

Using the data from Question 44, find the firm's dividend payout ratio

11%

22%

35%

65%