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Maize Mills Ltd. expects to generate net income of sh.10,000,000 in the current financial year. Additional information: 1. The firm’s management has established that acceptable investment proposal...

      

Maize Mills Ltd. expects to generate net income of sh.10,000,000 in the current financial year.

Additional information:
1. The firm’s management has established that acceptable investment proposal of sh.6,000,000 require financing.
2. The firm currently adopts a residual dividend policy.
3. The number of issued ordinary shares is 10,000,000

Required:
(i) The optimal total dividend payable and dividend per share assuming the firm adopts a residual dividend policy.
(ii) The optimal total dividend payable and dividend per share assuming the firm adopts a 50% payout ratio policy.
(iii) Advice the company on the dividend policy to adopt based on your answer in (c) (i) and (c) (ii) above.

  

Answers


Francis
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francis1897 answered the question on November 8, 2022 at 08:19


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