RESIDUAL DIVIDEND MODEL Walsh Company is considering three independent projects, each of which requires a $4 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects are presented here:

Note that the projects' costs of capital vary because the projects have different levels of risk. The company's optimal capital structure calls for 30% debt and 70% common equity, and it expects to have net income of $10,412,000. If Walsh establishes its dividends from the residual dividend model, what will be its payout ratio? Round your answer to two decimal places.

Project H (high risk) IRR 20% Cost of capital = 16% Project M (medium risk) IRR 10% Cost of capital = 13% Project L (low risk) Cost of capital = 8% IRR 9%