Computing dividend payout ratio

Reference no: EM1366556

Axel Telecommunications has a target capital structure that consists of 70% debt and 30% equity. The corporation anticipates that Axel capital budget for the upcoming year will be $3,000,000. If Axel reports net income of $2,000,000 and it follows a residual distribution model with all distributions as dividends, what will be its dividend payout ratio?

Reference no: EM1366556

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