Exercise 2 (Dividends and Dividend Policy) The target capital structure of the IGF Company is 0.25 and the net income is $18.5 million. The company needs a new investment on fixed assets equals $20...

Exercise 2 (Dividends and Dividend Policy)

The target capital structure of the IGF Company is 0.25 and the net income is $18.5 million. The company needs a new investment on fixed assets equals $20 million.

 Compute the dividends under a residual dividend policy.