Victor Rumsfeld Inc

question 21

Multiple Choice

Victor Rumsfeld Inc.'s dividend policy is under review by its board.Its projected capital budget is $2,000,000, its target capital structure is 60% debt and 40% equity, and its forecasted net income is $600,000.If the company follows a residual dividend policy, what total dividends, if any, will it pay out?

• A) $240,000
• B) $228,000
• C) $216,600
• D) $205,770
• E) $0

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Definitions:

Protista

A kingdom of diverse eukaryotic organisms, mostly unicellular, that are not animals, plants, or fungi, including algae, amoebas, and paramecia.

Eukaryotic Kingdoms

The classification categories in the biological taxonomy that comprise organisms with complex cells containing a nucleus, including plants, animals, fungi, and protists.

Unicellular

Consisting of a single cell, characteristic of organisms such as bacteria and many algae that perform all life processes within one cell.

Plasmodium Vivax

A species of protozoan parasite responsible for a type of malaria, characterized by recurring fevers and anemia.