What is the maximum amount of dividends the firm could pay

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Reference no: EM13263264

Planetary Travel Co. has $240,000,000 in stockholders' equity. Eighty million dollars is listed as common stock and the balance is in retained earnings. The firm has $600,000,000 in total assets and 3 percent of this value is in cash. Earnings for the year are $40,000,000 and are included in retained earnings. In terms of cash availiability, what is the maximum amount of dividends the firm could pay? Please show work.

A.)$10,000,000
B.) $18,000,000
C.) 12,000,000
D.) $15,000,000

Reference no: EM13263264

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