The Hawaiian Corporation expects this years net income to be $12 million. The firms target debt/assets ratio

Question:

The Hawaiian Corporation expects this year’s net income to be $12 million. The firm’s target debt/assets ratio is 30 percent. This year, Hawaiian has $20 million profitable investment opportunities. According to the residual dividend policy, what should be Hawaiian’s dividend payout ratio this year?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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