ABC, Inc. has 25,000 shares of stock outstanding at a market price of $20. The ﬁrm has $500,000 in outstanding debt. Earnings for next year are projected at $100,000. The ﬁrm plans on spending
$120,000 on capital projects next. The ﬁrm also maintains a constant debt-equity ratio. What is the
Projected dividend amount per share if the ﬁrm follows a residual dividend policy?

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The Answer of ABC, Inc. has 25,000 shares of stock outstanding at a market price of $20. The ﬁrm has $500,000 in outstanding debt. Earnings for next year are projected at $100,000. The ﬁrm plans on spending
$120,000 on capital projects next. The ﬁrm also maintains a constant debt-equity ratio. What is the
Projected dividend amount per share if the ﬁrm follows a residual dividend policy?

ABC, Inc Has 25,000 Shares of Stock Outstanding at a Market