Question
The capital structure of a company during the whole of this current financial year has been as follows: Ordinary Shares $1 fully paid - market
The capital structure of a company during the whole of this current financial year has been as follows: Ordinary Shares $1 fully paid - market value $800,000 6% debentures ($100 par value) $212,000 8% Unsecured Notes ($100 par value) $306,000 Last year's dividends for the company was 8 cents and this rate is expected to grow at a rate of 5% p.a. The market value of the company's ordinary shares is $2 per share. The market value of the debentures is $106; redeemable at par in 5 years. The market value of the notes is $102; redeemable at par in 3 years. The company tax rate is 30%. The expected dividend amount on ordinary shares for this financial year?
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