What would be the payout ratio how much external financing


A firm has a target debt/equity ratio of 1.5. Aftertax earnings for 2007 were $5m and the firm needs $4m for new investments. If the company follows a residual dividend policy, what dividend will be paid? What would be the payout ratio? How much external financing could be raised without issuing new capital?

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Financial Management: What would be the payout ratio how much external financing
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