Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Transcribed Image Text:Question:
Bauer Brewing Co. has the following data
(dollars in thousands). If it follows the residual
dividend model, what will its dividend payout
ratio be?
Capital budget $15,000
% Debt
55%
Net income (NI) $9,000
a. 25.00%
b. 30.00%
c. 45.00%
d. 60.00%
e. 75.00%
Capital Budget:
Capital budget can be explained as the amount
of money that a company is planning to incur on
its capital assets. A company can finance its
capital budget internally as well as through
external sources.
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