Week 4 Quiz

|1. |

|Question : |

|(TCO C) Pate & Co. has a capital budget of $3,000,000. The company wants to maintain a target capital structure that is 15 percent debt and |

|85 percent equity. The company forecasts that its net income this year will be $3,500,000. If the company follows a residual dividend |

|policy, what will be its total dividend payment?  |

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|(a) $205,000  |

|(b) $500,000  |

|(c) $950,000  |

|(d) $2,550,000  |

|(e) $3,050,000 |

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|Student Answer:...