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Residual dividend model: payout ratio 10. McClelland Industries has a capital budget of $1,500,000, but it wants to maintain a target capital structure of 30%
Residual dividend model: payout ratio
10. McClelland Industries has a capital budget of $1,500,000, but it wants to maintain a target capital structure of 30% debt and 70% equity. The company expects to pay a dividend of $450,000. If the company follows a residual dividend policy, what is its forecasted dividend payout ratio?
a. 30.00%
b. 33.33%
c. 37.50%
d. 40.00%
e. 42.55%
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