Chandler Communications' CFO Has Provided the Following Information: • the Company's

question 41

Multiple Choice

Chandler Communications' CFO has provided the following information: • The company's capital budget is expected to be $5,000,000.
• The company's target capital structure is 70 percent debt and 30 percent equity.
• The company's net income is $4,500,000.
If the company follows a residual distribution policy (with all distributions in the form of dividends) , what portion of its net income should it pay out as dividends this year?

• A) 33.33%
• B) 40.00%
• C) 50.00%
• D) 60.00%
• E) 66.67%

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