ALTERNATIVE DIVIDEND POLICIES Rubenstein Bros. Clothing is expecting to pay an annual dividend per share of $0.75 out of annual earnings per share of $225. Currently. Rubenstein Bros stock is selling for $12.50 per share. Adhering to the company’s target capital structure, the firm has $10 million in total invested capital, of which 40% is funded by debt. Assume that the firm’s book value of equity equals its market value. In past years, the firm has earned a return on equity (ROE) of 18%, which is expected to continue this year and into the foreseeable future.
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