International Cargo Inc. which is subjected to 20% tax rate employs residual dividend policy to its ordinary shareholders. The expected before tax net income for the year is P2,500,000. The firm will retain a 75% plowback ratio. International Cargo Inc. is funded only by common equity and debt on which the target debt ratio is 60%.
International Cargo Inc. which is subjected to 20% tax rate employs residual dividend policy to its ordinary shareholders. The expected before tax net income for the year is P2,500,000. The firm will retain a 75% plowback ratio. International Cargo Inc. is funded only by common equity and debt on which the target debt ratio is 60%.
Chapter15: Dividend Policy
Section: Chapter Questions
Problem 13P
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International Cargo Inc. which is subjected to 20% tax rate employs residual dividend policy to its ordinary shareholders. The expected before tax net income for the year is P2,500,000. The firm will retain a 75% plowback ratio. International Cargo Inc. is funded only by common equity and debt on which the target debt ratio is 60%.
Assuming the company has 200,000 ordinary shares outstanding, how much is the dividends per share?
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