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Question
Using the following financial data, determine the maximum dividends per share that can be paid to stockholders before the firm's value would be threatened. Base your answer on the economic value added model.
EBIT $6,000,000
Total Capital $8,000,000
Shares Outstanding 1,000,000
Marginal Tax Rate 35%
Debt/Assets Ratio 60%
WACC 20%
Cost of Debt 10%
a. $0.50
b. $0.70
c. $2.00
d. $2.30
e. $3.10
Answer
This answer is hidden. It contains 165 characters.
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