David Rose Inc

question 45

Multiple Choice

David Rose Inc.forecasts a capital budget of $500,000 next year with forecasted net income of $400,000.The company wants to maintain a target capital structure of 30% debt and 70% equity.If the company follows the residual dividend policy, how much in dividends, if any, will it pay?

• A) $42,869
• B) $45,125
• C) $47,500
• D) $50,000
• E) $52,500

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Definitions:

Creativity-Relevant Processes

Cognitive and behavioral processes that facilitate creative thinking, including problem-solving, risk-taking, and drawing connections between ideas.

Creativity

The ability to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.

Motivation

The intrinsic or extrinsic factors that stimulate desire and energy in people to be continually interested in and committed to a job, role, or subject, or to make an effort to attain a goal.

Exploitative Innovation

Innovation focused on refining existing products, services, or processes to enhance efficiency and effectiveness.