Chapter 14: The Pioneer Corporation has a target capital structure that consists of 55% debt and 45% equity. Pioneer's capital budget next year will be $10,000,000. Given that the company follows a residual dividend policy and its most recent yearly net income is $6,000,000, determine the Pioneer's dividend payout ratio. Note: Dividend payout ratio = dividends/net income.

Answer choices:

12%

38%

47%

25%