Only question 16-7 ! This problem comes from the book: financial management 7th edition by Timothy J. Gallagher

Year 1 Year 1 Year 2 Year 3 Net Income million) What 20 is the total addition to retained earnings over the last three years? 16-6. Use the same data given in problem 16-5. Now, if the company followed a constant dollar constant Dollar dividend policy and paid $10 million in dividends each year, compute dividend payout Dividend Policy ratios for each year and the the total addition to retained eamings over the last three years. 16-7. Eliza Doolittle, the chief officer of East West Communications Corporation, has Residual Dividend identified $14 worth of new capital projects that the company should invest in Theory next year. The optimal capital structure for the company is 40 percent debt and 60 percent equity. If the expected eamings for this year are s10 what amount of should she recommend according to residual theory? 16-8. Use the same data given in problem 16-7. Now, what would be the amount of dividend Residual Dividend that could be paid if East West's net income for this year is a. S16 million? b. $6 million? 9. DreamScapes Entertainment's financial managers have determined that the company Residual Dividend needs $12 million to fund its new projects for next year optimal capital structure of 20 percent debt and the rest equity. This year the company has $24 million in eamings available to common stockholders and 20,000,000 shares outstanding. According to the residual theory, what is the dividend per share paid to common stockholders? Stock Dividend 16-10. Jan Brady, chief accountant of Mulberry Silk Products. is trying to work out the follows: feasibility of a 20 percent stock dividend. The equity section of the balance sheet 000s) 2,000