International Cargo Inc. which is subjected to 20% tax rate employs residual dividend policy to its ordinary shareholders. The expected before tax net income for the year is P2,500,000. The firm will retain a 75% plowback ratio. International Cargo Inc. is funded only by common equity and debt on which the target debt ratio is 60%. Assuming that the shares of International Cargo Inc. has a market price of P35, what is the dividend yield?

International Cargo Inc. which is subjected to 20% tax rate employs residual dividend policy to its ordinary shareholders. The expected before tax net income for the year is P2,500,000. The firm will retain a 75% plowback ratio. International Cargo Inc. is funded only by common equity and debt on which the target debt ratio is 60%. Assuming that the shares of International Cargo Inc. has a market price of P35, what is the dividend yield?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 4P

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