With all distributions in the form of dividends

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Davis Inc. expects to have net income of $5,000,000 during the next year. Plato's target capital structure is 40% debt and 60% equity. The company has determined that the optimal capital budget for the coming year is $6,000,000. If Davis follows a residual distribution policy (with all distributions in the form of dividends) to determine the coming year's dividend, then what is Davis's dividend payments?

Reference no: EM13927685

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