A firm's value depends on its expected free cash filow and its cost of capital. Distributions made in the form of dividends or stock repurchses impact the firm's lue and the investors in different ways. Some analysts have argued that a firm's value should solely be determined by its basic earning power and the business risk of the firm. Which of these concepts would support these analysts' argument?

Walth Company is considering three independent projects, each of which requires a $3 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects are presented below Project H (High risk) Cost of capital -17% IRR = 22 Project M (Medium risk) Cost of capital -14% IRR - 11 Project L (Low risk) Cost of capital - 84 TRA - 10% Note that the projects couts of capital vary because the projects have different levels of risk. The company optimal capital structure calls for 35% debt und common equity, and it expects to have net income of $10,867,000. The data has been colleded in the Mcrosoft Excel Online file below. Open the spacchett and perform the required analysis to answer the question below. x Open spreadsheet of Walth establishes its dividends from the residual dividend model, what will be to payout rat? Round your answer to two decimal places