CR$-1$ RESIDUAL DIVIDEND Systems Analytics Inc. $($SAI$)$ has $1$ million common shares outstanding. SAl has a target capital structure with $40\%$ equity and $60\%$ debt. The company projects net income of $$5$ million and investment projects requiring $$6$ million in the upcoming year.

a$.$ SAI uses the residual distribution model and pays all distributions in the form of dividends. What is the projected DPS$?$

ANSWER

b$.$ What is the projected payout ratio?