Purcell Farms Inc ?
A) 68

question 10

Multiple Choice

Purcell Farms Inc.has the following data,and it follows the residual dividend model.Currently,it finances with 15% debt.Some Purcell family members would like for the dividend payout ratio to be increased.If Purcell increased its debt ratio,which the firm's treasurer thinks is feasible,by how much could the dividend payout ratio be increased,holding other things constant? $$\begin{array} { l r } \text { Capital budget } & \$ 5,000,000 \\\text { Net income (NI) } & \$ 5,500,000 \\\% \text { Debt now } & 15 \% \\\% \text { Debt after change } & 80 \%\end{array}$$
?

• A) 68.5%
• B) 60.9%
• C) 60.3%
• D) 63.8%
• E) 59.1%

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Definitions:

Interdependence Chains

The complex series of relationships in which the actions or outcomes for one entity depend on other entities within a network or system.

Structuration Theory

This theory, developed by Anthony Giddens, explains how social practices are created and recreated through the agency of individuals within the constraints of social structure.

Agency

The capacity of individuals to act independently and make their own free choices, influenced by the structures within a society.

Discursive Consciousness

The capability to engage in and apply reasoning about actions and social conditions through the use of language and communication.