Walsh Company is considering three independent projects, each of which requires a $5 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects are presented below:

Project H (High risk):	Cost of capital = 16%	IRR = 20%
Project M (Medium risk):	Cost of capital = 13%	IRR = 12%
Project L (Low risk):	Cost of capital = 8%	IRR = 11%

Note that the projects' costs of capital vary because the projects have different levels of risk. The company's optimal capital structure calls for 45% debt and 55% common equity, and it expects to have net income of $6,095,000. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below.

Residual dividend model
Each project's investment cost	$5,000,000
Cost of capitalH - Cost of capitalM	3.00%
IRRM - IRRL	1.00%
Project	Cost of Capital	Internal Rate of Return
H (High Risk)	16.00%	20.00%
M (Medium Risk)	13.00%	12.00%
L (Low Risk)	8.00%	11.00%
Firm's Capital Structure Weights:
% debt in capital structure, wd	45.00%
% common equity in capital structure, wc	55.00%
Net income	$6,095,000
Calculation of Capital Budget:
Project	Include in Budget (Y/N)	Investment Cost
H (High Risk)
M (Medium Risk)
L (Low Risk)
Total Capital Budget
"Calculation of Capital Budget Financed with Common Equity:"		Formulas
Common equity required		#N/A
"Calculation of Common Dividends Using Residual Model:"
Common dividends		#N/A
Calculation of Dividend Payout Ratio:
Dividend payout ratio		#N/A

If Walsh establishes its dividends from the residual dividend model, what will be its payout ratio? Round your answer to two decimal places.

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