Jumbo Shrimp Corporation and Giant Shrimp Company are in the same industry; both are publicly held with a large number of shareholders; and they have the following characteristics:

On the basis of this information, which company is likely to have the higher dividend-payout ratio? Why?

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Expected annual cash flow (in thousands) Standard deviation of cash flow (in thousands) Annual capital expenditures (in thousands) Cash and marketable securities (in thousands) Existing long-term debt (in thousands) Unused short-term line of credit (in thousands) Flotation costs on common stock issues JUMBO S 50,000 30,000 42,000 5,000 100,000 25,000 GIANT $35,000 25,000 40,000 7,000 85,000 10,000 as a percent of proceeds