Altamonte Telecommunications has a target capital structure that consists of 50% debt and 50% equity. The company anticipates that its capital budget for the upcoming year will be $3,000,000. If Altamonte reports net income of $1,600,000 and it follows a residual dividend payout policy, what will be its dividend payout ratio? Round your answer to two decimal places.
%
rate positively..
Given that - | |||
i | Net income = | 1,600,000 | |
ii | Capital budgeting requirement= | 3,000,000 | |
iii | Share of equity @ 50% | 1,500,000 | |
iv=i-iii | dividend as per residual policy = | 100,000 | |
v=iv/i | Dividend payout ratio = | 6.25% | |
ans = | 6.25% |
Altamonte Telecommunications has a target capital structure that consists of 50% debt and 50% equity. The...
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