Charming Communications' CFO has provided the following information: The company's capital budget is expected to be $5,000,000. The company's target capital structure is 60 percent debt and 40 percent equity. The company's net income is $4,500,000. If the company follows a residual distribution policy (with all distributions in the form of dividends), what will be its payout ratio?

Select one:

a. 33.33%

b. 40.00%

c. 55.56%

d. 60.00%

e. 66.67%