Explain the residual distribution model of setting the target distribution level. Do we have any evidence that firms actually use this model? Assume a company is planning for capital expenditures in the amount of $45 million next year, and that they expect net income in the amount of $30 million. They would like to finance 60% of their capital budget with equity and maintain their dividend payout ratio of 30%. Explain the problem in using the residual model in this example, and suggest two specific things they could do to resolve it. (10 pts.)