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Residual dividend model: payout ratio McClelland Industries has a capital budget of $1,500,000, but it wants to maintain a target capital structure of 30% debt
Residual dividend model: payout ratio
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?
30.00%
33.33%
37.50%
40.00%
42.55%
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