Fletcher Corp. has a capital budget of $1,000,000, but wants to maintain a target capital structure of 60% debt and 40% equity. The company forecasts this years net income to be $600,000. If the company does follow a residual dividend policy, what will be its dividend paid? What will be its dividend payout ratio?© BrainMass Inc. brainmass.com June 3, 2020, 11:45 pm ad1c9bdddf
The amount of retained earnings required is $400,000 (.40 x $1,000,000) ...
A residual dividend policy is assessed, and dividend and payout ratio are calculated.