This is a more difficult but informative problem. James Brodrick & Sons, Incorporated, is growing rapidly and, if at all possible, would like to finance its growth without selling new equity. Selected information from the companys five-year financial forecast follows.

Year	1	2	3	4	5
Earnings after tax ($ millions)	100	124	164	221	300
Capital investment ($ millions)	180	300	300	366	520
Target book value debt-to-equity ratio (%)	130	130	130	130	130
Dividend payout ratio (%)	?	?	?	?	?
Marketable securities ($ millions)	240	240	240	240	240
(Year 0 marketable securities = $240 million)

a. According to this forecast, what dividends will the company be able to distribute annually without raising new equity and while maintaining a balance of $240 million in marketable securities? What will the annual dividend payout ratio be? (Hint: Remember sources of cash must equal uses at all times.)