You have run a regression of dividend payout ratios against expected growth and risk (beta) for all companies in the market and arrived at the following equation:

Payout ratio=0.80 -1.2 Expected Growth -0.25 Beta

Using this regression, estimate the dividend payout ratio for a firm with an expected growth rate of 20% and a beta of 1.2.

Select one: a. 40% b. 10% c. 56% d. 26%