A company's projected capital budget is $1,200,000, its target capital structure is 50% debt and 50% equity, and its forecasted net income is $700,000. If the company follows a residual dividend policy, what total dividends, if any, will it pay out and what is the payout ratio?

		100,000; 14.29%
		200,000; 28.57%
		300,000; 42.86%
		250,000; 35.71%
		150,000; 21.43%

A company needs $1,000,000 million for 5 months. A bank agreed to lend the $1 million at a rate of 5.5 percent per annum, using a loan secured by the companys inventory of widgets. A field-warehouse agreement would be used, which would cost this company $2,500 a month. What is the APR for this loan?

		11.50%
		12.50%
		8.50%
		9.50%
		10.50%