Dentaltech Inc A) 372%
B) 39

question 48

Multiple Choice

Dentaltech Inc. projects the following data for the coming year. If the firm follows the residual dividend model and also maintains its target capital structure, what will its dividend payout ratio be? $$\begin{array} { l c l c } \text { EBIT } & \$ 2,000,00 & \text { Capital budget } & \$ 850,000 \\\text { Interest rate } & 10 \% & \% \text { Debt } & 40 \% \\\text { Debt outstanding } & \$ 5,000,00 & \% \text { Equity } & 60 \% \\\text { Shares outstanding } & 5,000,000 & \text { Tax rate } & 40 \%\end{array}$$

• A) 37.2%
• B) 39.1%
• C) 41.2%
• D) 43.3%
• E) 45.5%

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Definitions:

Outside Provider

An external entity or organization that supplies goods or services to another business or individual.

Special Order

A one-time or unique purchase order for goods or services, often tailored to specific requirements outside of regular offerings.

Broker Commission

A fee paid to a broker for executing a transaction. It is typically calculated as a percentage of the transaction value.

Differential Income

The increase or decrease in income resulting from a change in business decisions or operations.