The Clydesdale Corporation has an optimal capital structure consisting of 70 percent debt and 30 percent
equity. The marginal cost of capital is calculated to be 14.75 percent.
Total earnings available to common
stockholders for the coming year total 1,200,000. Investment opportunities are:
Project Investment IRR ()
A 1,000,000 22
B 750,000 18
C 1,250,000 15
D 500,000 14
a. According to the residual dividend theory, what should the firm's total dividend payment be?
b. If the firm paid a total dividend of 675,000, and restricted equity financing to internally generated funds,
which projects should be selected? Assume the marginal cost of capital is constant.
Question 2
If two projects are mutually exclusive, then the IRR is more important than the NPV in deciding the
project that should be chosen.
Indicate whether the statement is true or false
Structure of a bone.
General structure of a virus.
IgG Antibody Structure
Overall structure of section of macula
Structure of polypeptide chains
Structure of ATP