Walter Industries Is a Family Owned Concern

question 54

Multiple Choice

Walter Industries is a family owned concern.It has been using the residual dividend model,but family members who hold a majority of the stock want more cash dividends,even if that means a slower future growth rate.Neither the net income nor the capital structure will change during the coming year as a result of a dividend policy change to the indicated target payout ratio.By how much would the capital budget have to be cut to enable the firm to achieve the new target dividend payout ratio? ​

• A) -$3,516,949
• B) -$4,044,492
• C) -$3,727,966
• D) -$4,079,661
• E) -$2,919,068

---

Definitions:

Insecure Attachments

A type of attachment style observed in some children who show anxiety or avoidance in relationships, often as a result of inconsistent caregiving.

Addicted to Alcohol

A physical and psychological dependence on alcohol, characterized by a compulsion to drink and a difficulty in controlling consumption despite adverse effects.

Suppress Anxieties

The act of consciously or unconsciously preventing anxious thoughts or feelings from becoming apparent.

Drown Sorrows

Drown sorrows is an idiomatic expression referring to the attempt to forget one's problems or alleviate emotional pain through indulgence, often in alcohol.