3. LChem Corporation, a chemical manufacturing firm with changing investment opportunities, is considering a major change in dividend policy. It currently has 50 million shares outstanding and pays an annual dividend of $2 per share. The firm current and projected income statement are provided below (in millions): Current Projected Next Yr 1350 250 1100 EBITDA 1200 - Depreciation 200 EBIT 1000 - Interest 200 Expense EBT 800 - Taxes 320 Net Income 480 200 900 360 540 The firm's current capital expenditure is $ 500 million. It is going to invest in a new project next year requiring an out lay of $190 million. The firm's current beta is 1.0, and the current T. Bond rate is 8.5%. The firm expects working capital to increase $50 million both this year and next. The firm plans to finance its capital expenditures and working capital needs with 30% debt. a. What is the firm's current payout ratio? b. What proportion of its current free cash flow to equity is it paying out as dividends? c. How much cash will the company have available to pay out as dividends next year? (What is the maximum amount the company can pay out as dividends? ) d. Would you pay out this maximum amount as dividends? Why or why not? What other considerations would you bring to this decision