A$.$ Suppose your company has a current capital structure of $65\%$ in equity and $35\%$ in

debts.

As the finance manager you are planning to introduce a new product in the next year that

requires $1\mathrm{.}25$ millions. As per the accounts, current year net income of the company is

$$1\mathrm{.}35$ millions.

b$)$ If your company uses the Residual Dividend Payout Policy, how much dividend can

be paid to the shareholders this year?

c$)$ Calculate the dividend payout ratio