Baersox, Inc. maintains a debt-equity ratio of.55 and follows a residual dividend policy. The company has after-tax earnings of $2,800 for the year and has capital requirements of $2,500. What is the total amount Baersox will pay out in dividends this year?
A) $300
B) $1,187
C) $1,425
D) $1,675
E) $1,913
Correct Answer:
Verified
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