# Question: as a financial manager for willpower inc you have the...

###### Question details

As a financial manager for WillPower, Inc, you have the
following information:

a) The company follows a residual dividend policy;

b) The total capital budget for next year is likely to be
$8,000,000;

c) The forecasted level of earnings next year is $8,000,000;

d) The target or optimal capital structure is a debt ratio of
40%;

Please answer the following questions:

a. What will be the amount funded with equity for the project ? (Keep the answer to a whole number. Example of answer format: $1,000,000)

b. Compute the amount of the dividend . (Keep the answer to a whole number. Example of answer format: $1,000,000)

c. Compute the dividend pay-out ratio . (Keep the answer to two decimals. Example of the answer format: 55.55%)