Power X is a utility company in the Midwest. It's revenues and profitability have been rather stable and are growing at a slow but steady pace. Therefore, Power X is building its cash balances on its balance sheet. Which of the following actions do you recommend its management takes?

f answer choices

A large, one time dividend

An increase in its regular dividends.

A stock dividend.

A large stock repurchase program.

Your company is considering the following independent, average-risk investment projects:

Project	Size of Project	Project IRR
Project V	$600,000	12.0%
Project W	$400,000	11.5
Project X	$300,000	11.0
Project Y	$200,000	10.5
Project Z	$100,000	10.0

The company has a target capital structure that consists of 60 percent debt and 40 percent equity. Its net income estimated to be $550,000. Its WACC is 11.2%.

Question:

Using the residual dividend model: what is the company's dividend payout ratio? Show your calculations