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A firm with 500,000 shares outstanding earns $2 per share and pays out 40% of its earnings as dividends. a) By how much will the

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A firm with 500,000 shares outstanding earns $2 per share and pays out 40% of its earnings as dividends. a) By how much will the firm's retained earnings increase? b) Assuming that it follows a residual dividend policy (and raises no new capital) how much does it invest

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