Yahtze & Company projects next year's after-tax earnings at $900,000 and proposes spending $700,000 on new capital budgeting projects. The target capital structure is 40% debt and 60% equity. What dividend payout ratio would be appropriate to maintain the target capital structure?

Question

Quizplus · Accepted Answer

The Answer of Yahtze & Company projects next year's after-tax earnings at $900,000 and proposes spending $700,000 on new capital budgeting projects. The target capital structure is 40% debt and 60% equity. What dividend payout ratio would be appropriate to maintain the target capital structure?

Yahtze & Company Projects Next Year's After-Tax Earnings at $900,000