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The Wei Corporation expects next years net income to be $15 million. The firms debt ratio is currently 40%. Wei has $12 million of profitable
The Wei Corporation expects next years net income to be $15 million. The firms debt ratio is currently 40%. Wei has $12 million of profitable investment opportunities, and it wishes to maintain its existing debt ratio. According to the residual distribution model (assuming all payments are in the form of dividends), how large should Weis dividend payout ratio be next year?
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