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M13 Gitman547280 07 MFBrief C13
M13 Gitman547280 07 MFBrief C13
Payout Policy
Learning Goals
In states where the firm’s legal capital is defined as the par value
of its common stock, Miller Flour Company could pay out
$340,000 ($200,000 + $140,000) in cash dividends without
impairing its capital. In states where the firm’s legal capital
includes all paid-in capital, the firm could pay out only $140,000
in dividends.
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