The target capital structure of the IGF Company is 0.25 and the net income is $18.5 million. The company needs a new investment on fixed assets equals $20 million.  Compute the dividends under a residual dividend policy.

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter2: Analysis Of Financial Statements
Section: Chapter Questions
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Exercise 2 (Dividends and Dividend Policy)

 

The target capital structure of the IGF Company is 0.25 and the net income is $18.5 million. The company needs a new investment on fixed assets equals $20 million.

 Compute the dividends under a residual dividend policy.

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