Payment of dividend causes debt to equity ratio to triple

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Reference no: EM131997864

Dania Incorporated has a debt to equity ratio of 1.0 and has decided to pay a cash dividend. Their cash balance before payment of the dividend was $300 and their net income for the year was $350. Dania Inc. has total debt of $300, their tax rate is 34% and they maintain a stable dividend policy. Payment of the dividend causes their debt to equity ratio to triple. If other assets of the company are $200, how much cash does Dania Inc have left after the dividend is paid?

Reference no: EM131997864

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