CHAPTER 18

Since the debt-equity ratio is .80, we can find the new borrowings for the company by multiplying the equity investment by the debt-equity ratio, so: ... The payout ratio is the dividend per share divided by the earnings per share, so: Payout ratio = $0.80/$7 . Payout ratio = .1143 or 11.43%. b. Under a residual dividend policy, the additions ... ................
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