The Daily News maintains a debt-equity ratio of.60 and follows a residual dividend policy. The firm needs $1,300 for new investments next year. The after-tax earnings this year are $1,600. What is the amount that The Daily News will pay out in dividends for the year?
A) $600
B) $788
C) $1,080
D) $1,120
E) $1,413
Correct Answer:
Verified
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