Question: The Garlington Corporation expects next year s net income to be

The Garlington Corporation expects next year’s net income to be $15 million. The firm’s debt/assets ratio currently is 40 percent. Garlington has $12 million of profitable investment opportunities, and it wishes to maintain its existing debt/assets ratio. According to the residual dividend policy, how large should Garlington’s dividend payout ratio be next year?

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  • CreatedNovember 24, 2014
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