Residual Distribution PolicyprojectsHarris Company must set its investmentand dividend policies for the comingyear. It has three independentfrom which to choose, each of whichrequires a $4 million investment. Theseprojects have different levels of risk, andtherefore different costs of capital. Theirprojected IRRs and costs of capital areas follows:Cost ofcapital =Cost ofcapitalCost ofcapital =Harris intends to maintain its 45% debtand 55% common equity capitalstructure, and its net income is expectedto be $6,500,000. If Harris maintains itsresidual dividend policy (with alldistributions in the form of dividends),what will its payout ratio be? Round youranswer to two decimal places.Project A:Project B:Project C:%18%;=13%;9%;IRR 17%=IRR 11%=IRR 10%=

Given: Particulars Amount Cost of capital $4,000,000 Project Cost of capital Internal…

projects Harris Company must set its investment and dividend policies for the coming year. It has three independent from which to choose, each of which requires a $4 million investment. These projects have different levels of risk, and therefore different costs of capital. Their projected IRRs and costs of capital are

projects Harris Company must set its investment and dividend policies for the coming year. It has three independent from which to choose, each of which requires a $4 million investment. These projects have different levels of risk, and therefore different costs of capital. Their projected IRRs and costs of capital are

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 9P: Residual Distribution Policy Harris Company must set its investment and dividend policies for the...

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