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Building Inc. earned $12 million in 2020. The company has a target D/E ratio of 1:3, and is considering investing in two positive NPV projects

Building Inc. earned $12 million in 2020. The company has a target D/E ratio of 1:3, and is considering investing in two positive NPV projects that require an initial investment of $6 million cash. What is the companys dividend payout ratio under a residual dividend policy?

25%

50%

33.3%

36%

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