Explore BrainMass

Explore BrainMass

    Amount of the dividends

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

    How is this problem done in excel?

    XYZ has a capital budget of $60 million, it optimal capital structure is 40% debt and 60% equity. Its EBIT was $98 million for a year. Has $200 million in assets and pays 10%on all of its debt. Tax rate is 35%. If the firm uses a residual policy, what will be the amount of the dividends it pays after financing its capital budget?

    © BrainMass Inc. brainmass.com June 3, 2020, 6:27 pm ad1c9bdddf

    Solution Summary

    This solution explains the steps to compute the amount of the dividends.