Debt carries covenants

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Your firm successfully issued new debt last? year, but the debt carries covenants.? Specifically, you can only pay dividends out of earnings made after the debt issue and you must maintain a minimum quick? (acid-test) ratio left parenthesis Current Assets minus Inventory right parenthesis divided by Current Liabilities

(Current Assets−Inventory)/Current Liabilities

of 1.2. Your net income this year was $69.6 million. Your cash is $10.5 million, your receivables are $7.6 million, and your inventory is $4.6 million. You have current liabilities of $19.1 million. What is the maximum dividend you could pay? (in cash and in? stock) this year and still comply with your? covenants?

The maximum dividend would be $___ million.  ?(Round to one decimal? place.)

Reference no: EM131453477

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