Question: Please show all working, thanks! Problem 6 (10 marks) ABC firm has a debt to equity ratio of 2.34 (that they wish to maintain) and

Please show all working, thanks! Problem 6 (10 marks) ABC firm

Please show all working, thanks!

Problem 6 (10 marks) ABC firm has a debt to equity ratio of 2.34 (that they wish to maintain) and new investments would cost \\( \\$ 75 \\) million this year. The firm expects earnings of \\( \\$ 25 \\) million this year. a) Calculate the dividends paid and total external financing required if the firm follows a residual dividend policy. ( 6 marks) b) Calculate the dividends paid and total external financing required if the firm has a fixed payout ratio of \25 ( 4 marks)

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