Answer:
Wagner company should pay $10 million in dividend.
Explanation:
Given:
Last year earnings = $100,000,000
Last year dividends = $20,000,000
Anticipated Earnings this year = $80,000,000
Investment project = $70,000,00
The amount of dividends to be paid, under residual dividend policy is calculated as:
Dividend= Earnings - investment requrements.
Dividend = $80,00,000 - $70,000,000 = $10,000,000
Wagner company should pay $10 million in dividends