Explore BrainMass

Explore BrainMass


    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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

    © BrainMass Inc. brainmass.com June 3, 2020, 7:54 pm ad1c9bdddf

    Solution Preview

    Answer: b. $ 800,000

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

    Solution Summary

    Calculates the amount of dividends.