SMPH has a strict residual dividend policy and they projected that the net result of their operation this year is positive at P12,000,000. SMPH has a target capital budget of P10,000,000 and a funding structure of 30% debt and 70% equity. Assuming the company has 400,000 issued ordinary shares on which 50,000 is held as treasury shares, what will be the dividends per share?

SMPH has a strict residual dividend policy and they projected that the net result of their operation this year is positive at P12,000,000. SMPH has a target capital budget of P10,000,000 and a funding structure of 30% debt and 70% equity. Assuming the company has 400,000 issued ordinary shares on which 50,000 is held as treasury shares, what will be the dividends per share?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 4P

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SMPH has a strict residual dividend policy and they projected that the net result of their operation this year is positive at P12,000,000. SMPH has a target capital budget of P10,000,000 and a funding structure of 30% debt and 70% equity. How much of the net income will be used to fund the equity portion of the capital budget? Assuming the company has 400,000 issued ordinary shares on which 50,000 is held as treasury shares, what will be the dividends per share?
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