Currently the firm has total market value of debt $$20$ million and total market value of equity $$60$ million. This capital structure is considered optimal by the management. The optimal capital budget for new investment for the coming period is determined to be $$20$ million. The total net income is estimated to be $$25$ million. The firm has $5$ million common shares outstanding. The firm pays dividend based on the residual policy. What would the dividend payout ratio be$?$

Select one:

a$.40\%$

b$.6\mathrm{.}9\%$

c$.0\%$

d$.35\%$