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Hermes Co. has a capital budget of $1,200,000. The company wants to maintain a target capital structure which is 60 percent debt and 40 percent


Hermes Co. has a capital budget of $1,200,000. The company wants to maintain a target capital structure which is 60 percent debt and 40 percent equity. The company forecasts that its net income this year will be $600,000. If the company follows a residual dividend policy, what will be its payout ratio? 



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