Homework: Homework 6 Question 5, P14-3 (similar to) eng 04/11/227.55 PM O HW Score: 0%, 0 of 8 points O Points: 0 of 1 Save Residual dividend polley As president of Young's of California, a large clothing chain, you have just received a letter from a major stockhsider. The stockholder asks about the company's dividend policy in fact the stockholder has asked you to estimate the amount of the dividend that you are likely to pay next year. You have not yet collected all the information about the expected dividend payment, but you do know the (1) The company follows a residual dividend policy (2) The total capital budget for next year is likely to be one of three amounts, depending on the results of capital butgeing states that are currently under way. The pal penure amour (3) The forecasted level of potential retained eamings next year is $2 million (4) The target or optimal capital structure is a debit ratio of 30%. You have decided to respond by sending the stockholder the best information available to you a. Compute the amount of the dividend (or the amount of new common stock needed) and the dividend payout rato for sech of the three capital expenditure amounts b. Compare, contrast, and discuss the amount of dividends (calculated in pant a) associated with each of the Tree capital expenditure amount a. If the capital expenditure amount is $2 millon, the amount of dividend the firm can pay is (Round to the nearest far)