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    Dividends

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    Morrison Movers's optimal capital structure calls for financing seventy percent of new assets with equity. Assuming that Morrison Movers has net income of $5 million, how much can be paid out in the form of a dividend and still have sufficient funds to cover a $6 million capital budget?
    a. $0, it needs all of the funds for expansion
    b. $ 800,000
    c. $4,200,000
    d. $5,000,000

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    https://brainmass.com/business/budgets/dividends-116206

    Solution Preview

    Answer: b. $ 800,000

    Amount required for capital budget= $6.00
    70% 0f ...

    Solution Summary

    Calculates the amount of dividends.

    $2.19

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