How much dividend can pay ptw pay


Problem

PTW Corp require RM100 million for capital budgeting investments. The current net income is RM30 million. The company can finance 30% of the required investment with debt and 70% with equity.

Equity Financing needed RM70M
New Issue RM50M
Net Income RM20M
Dividend RM30 - RM20 = RM10M

How much dividend can pay PTW pay if they can finance RM50M of the investment with new issues. Show calculation with explanation.

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