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Amount of the dividends

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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?

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

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