The firm also maintains a constant debt-equity ratio

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Reference no: EM132016005

ABC, Inc. has 25,000 shares of stock outstanding at a market price of $20. The firm has $500,000 in outstanding debt. Earnings for next year are projected at $100,000. The firm plans on spending $120,000 on capital projects next. The firm also maintains a constant debt-equity ratio. What is the projected dividend amount per share if the firm follows a residual dividend policy?

Reference no: EM132016005

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