Your firm successfully issued new debt last year, but the debt carries covenants. Specifically, you can only pay dividends out of earnings made after the debt issue and you must maintain a minimum quick (acid-test) ratio

(Current AssetsInventory)/Current Liabilities

of

1.1.

Your net income this year was

$70.0

million. Your cash is

$10.0

million, your receivables are

$8.0

million, and your inventory is

$5.0

million. You have current liabilities of

$19.0

million. What is the maximum dividend you could pay (in cash and in stock) this year and still comply with your covenants?

Question content area bottom

Part 1

The maximum dividend would be

$enter your response here

million.(Round to one decimal place.)