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TBC has two investment opportunities, A & B. A needs aninitial cash outlay of$18 million and its internal rate of returnis 20%. B needs $12 million and its internal rate of return is 10%.A is indivisible.B is also indivisble. The cost of capital is 16%.The debt/assets ratio is 40%, which is also the target ratio. Thisyear TBC's net income is $25 million. how much dividend should bedeclared this year if TBC follows a residual dividend policy
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