Poly is planning for P5 million in capital expenditures next year. Poly’s target capital structure consists of 60% debt and 40% equity. If net income next year is P3 million and Poly follows a residual distribution policy with all distributions as dividends, what will be its dividend payout ratio?

Poly is planning for P5 million in capital expenditures next year. Poly’s target capital structure consists of 60% debt and 40% equity. If net income next year is P3 million and Poly follows a residual distribution policy with all distributions as dividends, what will be its dividend payout ratio?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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