Calculate the dividends paid and external financing required

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ABC firm has a debt to equity ratio of 2.3( that they wish to maintain) and new investments would cost $35 million this year. The firm expects earnings of 12 million this year. A. calculate the dividends paid and external equity financing required if the firm follows a residual dividend policy. B. Calculate the dividends paid and external financing required if the firm has a fixed payout ratio of 25%.

Reference no: EM131059354

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