Welch Company is considering three independent projects, each of which requires a $3 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects is presented below:

Project H (High risk):	Cost of capital = 17%	IRR = 21%
Project M (Medium risk):	Cost of capital = 14%	IRR = 12%
Project L (Low risk):	Cost of capital = 7%	IRR = 10%

Note that the projects' costs of capital vary because the projects have different levels of risk. The company's optimal capital structure calls for 25% debt and 75% common equity, and it expects to have net income of $8,416,000. If Welch establishes its dividends from the residual dividend model, what will be its payout ratio?