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Find the firm dividend payout ratio

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A firm expects to have net income of $5,000,000 during the next year. The company's target capital structure is 35% debt and 65% equity. The company's director of capital budgeting has determined that the optimal capital budget for the coming year is $6,000,000. If SL Computer follows a residual distribution policy (with all distributions in the form of dividends) to determine the coming year's dividend, then what is the firm's expected dividend payments?

  • $1,100,000
  • $3,900,000
  • $5,000,000
  • $6,000,000

Using the data from Question 44, find the firm's dividend payout ratio

  • 11%
  • 22%
  • 35%
  • 65%

Reference no: EM132585432

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