Question: Given the data below, calculate the per share dividend by strictly following the Residual Dividend Model. In the Exaplanation box, discuss why the calculated dividends
| Given the data below, calculate the per share dividend by strictly following the Residual Dividend Model. In the Exaplanation box, discuss why the calculated dividends may not be appropriate. Then, create what you feel would be an ideal dividend policy for the firm and defend your recommendation in the Defense box. | ||||||||||
| Dividends using Residual Dividend Model: | ||||||||||
| Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | |||||||
| Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||
| Explanation (adjust cell height as necessary to fit response): | ||||||||||
| Your recommended payout: | ||||||||||
| Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | |||||||
| Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||
| Defense (adjust cell height as necessary to fit response): | ||||||||||
| Target Capital Structure: | 65% Equity, 35% Debt | |
| Number of Shares Oustanding | 3,000,000 | |
| Quarter | Expected Net Income | Expected Capital Needs |
| Q1 2022 | $ 1,700,000 | $ 850,000 |
| Q2 2022 | $ 1,900,000 | $ 850,000 |
| Q3 2022 | $ 1,850,000 | $ 1,100,000 |
| Q4 2022 | $ 2,150,000 | $ 850,000 |
| Q1 2023 | $ 2,050,000 | $ 850,000 |
| Q2 2023 | $ 2,050,000 | $ 1,150,000 |
| Q3 2023 | $ 1,950,000 | $ 850,000 |
| Q4 2023 | $ 2,250,000 | $ 850,000 |
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