Sloburn Barbeques Inc. uses the residual dividend model to set its div

Sloburn Barbeques Inc. uses the residual dividend model to set its dividends. Selected financial information for Sloburn is provided in the table below.

Selected Financial Information
Sloburn Barbeques Inc.
Net income $75 million
Equity capital structure weight 0.90
Total Dividends $7.5 million

How much additional funds did Sloburn need to borrow in order to finance its new investments?
A) $0
B) $10 M
C) $20 M
D) $7.5 M
E) $40 M

ANSWER

D