1. Farside Corporation follows a strict residual dividend policy. Its debt-equity ratio is 3. (a) If earnings for the year are 100, 000, what is the maximum amount of capital spending possible with no...

1.Farside Corporation follows a strict residual dividend policy. Its debt-equity ratio is 3.

(a) If earnings for the year are 100, 000, what is the maximum amount of capital spending possible with no new equity?

(b) If planned investment outlays for the coming year are ETB550,000, will Farside pay a dividend? If so, how much?

(c) Does Farside maintain a constant dividend payout? Why or why not?