1. Open Door Manufacturer earned $100,000 this year. The company follows the residual dividend policy when paying dividends. Open Door has deter-mined that it needs a total of $120,000 for investment in capital budgeting projects this year.
2. If the company debt/assets ratio is 50 percent, what will its dividend payout ratio be this year? Last year the Bulls Business Bureau (BBB) retained $400,000 of the $1 million net income it generated. This year BBB generated net income equal to $1.2 million. If BBB follows the constant dividend payout ratio dividend policy, how much should be paid in dividends this year?