A company wants to establish its dividend policy. Knowing that : - She anticipates a net profit of $10,000,000 at the end of the year, - It is financed exclusively from equity at a cost of 12%: What should then be the total amount of dividend to be distributed at the end of the year for each of the following cases:

1- If it detects new investment projects for an amount of $7,000,000 an expected return of 10%? 2- If it detects new investment projects for an amount of $10,000,000 an expected return of 14%? 3- If it detects new investment projects for an amount of $15,000,000 to an expected return of 14%? In this particular case, what should the company do?

Answer rating: 100% (QA)

To determine the total amount of dividend to be distributed in each case we need to apply the concep... View the full answer