Rohter Galeano Inc

question 52

Multiple Choice

Rohter Galeano Inc.is considering how to set its dividend policy.It has a capital budget of $3,000,000.The company wants to maintain a target capital structure that is 15% debt and 85% equity.The company forecasts that its net income this year will be $3,500,000.If the company follows a residual dividend policy, what will be its total dividend payment?

• A) $205,000
• B) $500,000
• C) $950,000
• D) $2,550,000
• E) $3,050,000

---

Definitions:

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, designed to provide consistency in how commerce is conducted across state lines.

Tender of Delivery

The act of offering to deliver goods to a buyer in fulfillment of a contract, usually done in a manner prescribed or agreed upon.

Conforming Goods

Products that meet the specifications and standards outlined in a purchase contract including quality, quantity, and other clearly defined characteristics.

Uniform Commercial Code

A set of laws that provide a standardized and comprehensive framework for the regulation of commercial transactions across the United States.