Calculate the resulting dividend payout ratio

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Question - Chim Industries has retained earnings available of RM1.2 million. The firm plans to make two investments that require financing of RM950,000 and RM1.75 million, respectively. Chim uses a target capital structure with 60% debt and 40% equity. Apply the residual theory to determine what dividends, if any, can be paid out, and calculate the resulting dividend payout ratio.

Reference no: EM133040282

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