1. RESIDUAL DIVIDEND MODEL

Axel Telecommunications has a target capital structure that consists of 35% debt and 65% equity. The company anticipates that its capital budget for the upcoming year will be $3,000,000. If Axel reports net income of $2,800,000 and it follows a residual dividend payout policy, what will be its dividend payout ratio? Round your answer to two decimal places.

2.STOCK SPLIT

Emergency Medical's stock trades at $145 a share. The company is contemplating a 3-for-2 stock split. Assuming that the stock split will have no effect on the market value of its equity, what will be the company's stock price following the stock split? Round your answer to the nearest cent.

3.STOCK REPURCHASES

Gamma Industries has net income of $1,100,000, and it has 1,130,000 shares of common stock outstanding. The company's stock currently trades at $59 a share. Gamma is considering a plan in which it will use available cash to repurchase 20% of its shares in the open market at the current $59 stock price. The repurchase is expected to have no effect on net income or the company's P/E ratio. What will be its stock price following the stock repurchase? Do not round intermediate calculations. Round your answer to the nearest cent.

4.RESIDUAL DIVIDEND MODEL

Walsh Company is considering three independent projects, each of which requires a $4 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects are presented here:

Project H (high risk):	Cost of capital = 17%	IRR = 22%
Project M (medium risk):	Cost of capital = 13%	IRR = 13%
Project L (low risk):	Cost of capital = 8%	IRR = 11%

Note that the projects' costs of capital vary because the projects have different levels of risk. The company's optimal capital structure calls for 60% debt and 40% common equity, and it expects to have net income of $8,331,500. If Walsh establishes its dividends from the residual dividend model, what will be its payout ratio? Round your answer to two decimal places.